TLDR
- Gold ETF withdrawals reached 2.7% of total assets since the Iran conflict started, while Bitcoin ETF deposits climbed 1.5%
- SPDR Gold Shares (GLD), the top gold ETF, experienced a historic $3 billion single-day exodus on March 6
- Net inflows into Bitcoin ETFs totaled $906 million over 30 days ending March 11, a reversal from $1.9 billion in outflows the previous month
- JPMorgan researchers observe Bitcoin’s price swings decreasing as institutional participation increases
- Historical patterns show Bitcoin gaining an average 54% in the year after US midterm elections
A dramatic capital rotation has emerged since late last month’s outbreak of the Iran conflict, with investors redirecting funds from gold-backed products into Bitcoin vehicles at an unprecedented rate.
SPDR Gold Shares (GLD), the premier spot gold exchange-traded fund, has witnessed capital flight representing approximately 2.7% of total assets. Simultaneously, BlackRock’s iShares Bitcoin Trust (IBIT), the dominant spot Bitcoin ETF, has accumulated inflows equivalent to roughly 1.5% of its holdings during this timeframe. These findings come from research conducted by JPMorgan’s team under managing director Nikolaos Panigirtzoglou.
March 6 marked a watershed moment when GLD registered a staggering $3 billion outflow in just 24 hours. This exodus dwarfed any previous single-day withdrawal by over 200% compared to the preceding two-year period, as reported by The Kobeissi Letter.
Bitcoin ETFs presented a contrasting narrative. Net 30-day inflows reached $906 million by March 11, a substantial improvement from the $1.9 billion net outflow recorded one month prior. Bitcoin ETF holdings measured in native currency units also rebounded, climbing to a positive 12,909 BTC after previously showing a deficit of 34,197 BTC.
This dramatic divergence eliminated the year-to-date lead that gold ETFs maintained over Bitcoin ETFs before the Iran situation escalated.
Institutional Positioning Has Shifted
JPMorgan’s research indicates that between October and early 2026, capital migrated from Bitcoin toward gold, particularly among retail market participants. Throughout this interval, IBIT experienced net withdrawals while GLD captured significant deposits.
However, the recent transformation extends beyond simple fund flows. Short positions in IBIT expanded in recent months while GLD short interest contracted. Researchers interpret this as evidence that hedge funds and institutional traders scaled back Bitcoin allocations while increasing gold exposure during that earlier phase.
The put-to-call ratio for IBIT options also climbed above GLD’s equivalent metric and has remained elevated since November, representing the first extended period where Bitcoin ETF derivatives markets displayed greater appetite for downside hedging compared to gold ETF options.
Despite the previous cautious sentiment, Bitcoin ETFs continue to lead gold ETFs in aggregate cumulative inflows since 2024. IBIT’s total deposits since inception are approximately double those of GLD during the comparable period.
Bitcoin Volatility Is Compressing
JPMorgan’s research team has identified signs of declining volatility in Bitcoin’s price behavior. They credit this phenomenon to expanding institutional participation and enhanced market depth.
Michaël van de Poppe, founder of MN Capital, highlighted that the Bitcoin-to-gold price ratio is exhibiting a bullish divergence on the relative strength index using daily timeframes. The ratio has recently retreated to a support zone around 12-13, an area that previously functioned as resistance in 2017 before transitioning to support during 2022 and 2023.
Implied volatility derived from GLD options has accelerated more dramatically than IBIT’s in recent months, indicating market participants anticipate wider price fluctuations in gold.
Binance Research characterized the present market conditions as presenting “opportunity within risk” for Bitcoin, observing that BTC has tracked macro assets including crude oil and US equities since the Iran conflict commenced.
Bitcoin ETF trading activity from US spot products has expanded lately. Nevertheless, US spot ETFs represent only approximately 9% of aggregate Bitcoin spot trading volume, significantly below the 30-40% ETF penetration observed in US stock markets.
Historical analysis reveals that the 12-month period following US midterm elections has never yielded negative returns for the S&P 500 since 1939, with average appreciation of 19%. Bitcoin has posted average gains of 54% across all three post-midterm election years in its trading history.
JPMorgan researchers maintained their long-term Bitcoin valuation target of $266,000 based on a volatility-normalized comparison with gold.
