Bitcoin’s ETF market is carrying a heavier layer of defensive positioning than gold, creating a potential source of support if investors begin to reduce those positions.
JPMorgan analysts led by Nikolaos Panigirtzoglou said Bitcoin could receive more support relative to gold if ETF hedging demand continues to ease. The comparison comes as both Bitcoin and gold attracted inflows after the Federal Reserve’s late July meeting, as investors returned to what they called the “debasement trade.”
Gold ETFs have recovered all of their outflows from earlier in 2026, while Bitcoin ETFs have recovered roughly half. At the same time, short interest in BlackRock’s iShares Bitcoin Trust, or IBIT, remains close to its highest level of the year, while short interest in SPDR Gold Shares, or GLD, is below its historical average. IBIT’s put-to-call open interest ratio is also higher than GLD’s, pointing to heavier downside positioning around Bitcoin exposure.
Bitcoin Has More Positioning to Unwind
Data cited in recent reports showed IBIT short interest at about 45.9 million shares at the August 31 settlement date, its highest level of 2026 and roughly 3.5% of the fund’s float. Investors can hold IBIT while shorting the ETF or buying puts, keeping exposure to Bitcoin while limiting directional risk. If those positions are closed while the underlying exposure is retained, short covering requires purchases of IBIT, while closing protective puts forces market makers to unwind short delta hedges.
The resulting flows depend on the structure of the options and dealer books, but both can affect demand without representing a new strategic allocation to Bitcoin. The OG cryptocurrency therefore has more defensive positioning to unwind than gold, while GLD’s lower short interest and put positioning leave less comparable exposure in place.
ETF Flows Do Not Show the Full Positioning
JPMorgan’s comparison shows the gap between ETF flows and the positioning surrounding them. Gold has fully recovered its earlier 2026 outflows, while Bitcoin has gotten back only about half, yet the latter’s ETF market retains more short and options positioning.
The key signal would be a decline in IBIT short interest and put positioning while ETF holdings remain stable or increase. That would indicate reduced defensive exposure without a corresponding decline in underlying Bitcoin holdings, creating room for short covering and dealer hedging flows to support the ETF.
However, if ETF holdings decline alongside the hedges, the interpretation changes. Lower hedging could then mean investors are exiting positions rather than simply reducing protection around existing exposure.
JPMorgan’s argument therefore depends on the relationship between ETF holdings and the derivatives positioning around them. Bitcoin has more defensive exposure in its ETF market than gold, but whether that becomes supportive depends on whether those positions unwind while underlying exposure is retained.
A clean reduction in hedging alongside stable spot Bitcoin ETF holdings would suggest tactical risk is fading without capital leaving the asset. That would also leave the “debasement trade” structurally intact, with investors reducing protection around their Bitcoin exposure. Meanwhile, the next short interest and options data will show whether that positioning is actually beginning to unwind.
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