Funds are clearly rotating, is gold and Bitcoin entering a "zero-sum game"?
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Funds are clearly rotating, is gold and Bitcoin entering a "zero-sum game"?
JPMorgan believes this "zero-sum game" will continue for the remainder of the year.
Navigating Web3 tides with focused insightsAuthor: Bu Shuqing, Wall Street Insights
JPMorgan指出， as "de-dollarization trades" stall, gold and bitcoin are entering a "zero-sum game." Since April 22, gold prices have fallen nearly 8% from their peak of $3,500, while bitcoin prices rose 18% during the same period.
This contrast is also reflected in fund flows. According to Fengtai Trading Desk, JPMorgan's latest report indicates that over the past three weeks, gold ETFs have experienced outflows, while bitcoin and crypto ETFs have attracted inflows.
JPMorgan expects the "zero-sum game" between gold and bitcoin will persist for the remainder of this year, with cryptocurrency-specific catalysts likely creating more upside potential for bitcoin in the second half. The report notes that in addition to capital shifting from gold, bitcoin is benefiting from several crypto-specific catalysts, including increased holdings by companies such as MicroStrategy and New Hampshire passing legislation allowing state treasury investments in bitcoin.
Reversal in Safe-Haven Assets
The report states that in Q4 2024, gold and bitcoin prices moved in tandem, especially during and after the U.S. election, when market concerns over dollar depreciation boosted both assets. However, in 2025, this "de-dollarization" trade has clearly stalled, shifting into a "zero-sum game" between gold and bitcoin prices.
Fund flows show three major characteristics:
Looking at physical gold and spot bitcoin/crypto ETF flows, gold has seen outflows over the past three weeks.
Meanwhile, bitcoin/crypto ETFs recorded inflows during the same period
Futures positioning data shows continued decline in gold futures positions, while bitcoin futures positions have increased significantly
This capital rotation is closely tied to changes in market conditions. JPMorgan notes that tariff tensions from mid-February to mid-April drove strong gains in gold, while bitcoin performed weakly alongside risk assets. Over the past three weeks, however, this trend has completely reversed amid improving market risk appetite.
This also suggests that under specific market conditions, investors rotate between these two types of safe-haven assets:
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During periods of tariff tension: gold rises, bitcoin falls.
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During periods of improved risk appetite: gold corrects, bitcoin rises.
JPMorgan expects the zero-sum relationship between gold and bitcoin will continue through the rest of 2025, but due to cryptocurrency-specific catalysts, bitcoin may have greater upside potential than gold in the second half.
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