JPMorgan: Bitcoin Pullback Deepens as "Currency Devaluation" Trade Unwinds

JPMorgan analysts said investors are still unwinding so-called "currency devaluation trades," with gold-linked exposure continuing to shrink and Bitcoin’s pullback accelerating in recent weeks. For the week ended June 5, the bank noted that gold ETFs recorded roughly $20 billion in outflows. Bitcoin ETFs have posted steadily rising outflows for four straight weeks. Positioning in the futures market is also being cut back. Institutional investors are reducing exposure to both gold and Bitcoin, signaling that retail and professional money alike are dialing down allocations aimed at hedging inflation, currency depreciation and geopolitical risk. JPMorgan said Bitcoin had become the main vehicle for the "currency devaluation" trade following the Middle East conflict, but the trend flipped in early May and has weakened further since. The bank added that thinning liquidity across ETF and futures markets has intensified Bitcoin’s price correction. Looking ahead to the second half of the year, analysts said the crypto market’s prospects hinge on two factors: whether crypto treasury firms can offer clearer guidance on dividend distributions, and whether the U.S. Clarity Act is approved. (Source: ODAILY)