Bitcoin maintains stability as gold and silver decline amid ETF withdrawals and liquidity pressures, according to JPMorgan.

The bank noted that institutional unwinding and declining liquidity have impacted precious metals, whereas bitcoin displays steadier inflows and improving momentum amidst geopolitical tensions.

Bitcoin remains stable as gold and silver decline due to ETF outflows and liquidity challenges, according to JPMorgan. (Unsplash)

Key points:

• JPMorgan reported that gold and silver prices have significantly dropped as ETF outflows and profit-taking increase.
• Bitcoin has recorded net inflows and stabilizing momentum, outperforming precious metals on a relative scale.
• The liquidity of gold has worsened compared to bitcoin, while the depth of the silver market has further weakened, the bank indicated.

Bitcoin BTC$68,953.10 is demonstrating greater resilience compared to traditional safe-haven assets as gold and silver experience downward pressure from outflows, position unwinds, and reduced liquidity, according to JPMorgan, a Wall Street investment bank.

"The decline in liquidity conditions for gold has resulted in its market breadth
falling below that of bitcoin at present," analysts led by Nikolaos Panigirtzoglou stated in the report released on Wednesday.

Bitcoin has exhibited relative strength in recent weeks following the onset of conflict in Iran, even after experiencing a significant correction from its record highs in October.

The cryptocurrency initially fell sharply alongside other risk assets, briefly dipping into the low-$60,000 range and triggering substantial liquidations as investors sought to reduce exposure amid geopolitical instability.

However, the sell-off was brief. Prices have since stabilized within the high-$60,000 to low-$70,000 range, despite ongoing tensions and oil prices rising above $100 per barrel.

The price movements imply that bitcoin is acting less like a traditional safe haven during the immediate shock phase and more like a high-beta macro asset, initially selling off before finding support as capital flows return and long-term holders engage once panic subsides.

Gold has decreased approximately 15% month-to-date, reversing a previously crowded rally that elevated prices to record levels near $5,500 in January. Silver, which peaked around $120, has followed a similar downward trajectory. JPMorgan analysts attributed the decline to rising interest rates, a stronger U.S. dollar, and extensive profit-taking by both retail and institutional investors.

Flow data further underscores this shift. Gold ETFs experienced nearly $11 billion in outflows during the first three weeks of March, while silver ETF inflows accumulated since last summer have been reversed, as noted in the report. Conversely, bitcoin funds have continued to draw net inflows throughout the same timeframe.

Positioning data tells a similar narrative. JPMorgan’s proxy for institutional activity, based on open interest in Chicago Mercantile Exchange (CME) futures, indicates a sharp increase in gold and silver exposure through late 2025 into early 2026, followed by a significant decline since January as investors reduce positions. In contrast, bitcoin futures positioning has remained relatively steady in recent weeks.

Momentum indicators also reveal divergences. The bank observed that trend-following investors, such as Commodity Trading Advisors (CTAs), have significantly decreased their exposure to gold and silver, with indicators shifting from overbought to below-neutral levels. This change in positioning has likely intensified recent price drops. Meanwhile, bitcoin momentum is recovering from oversold conditions toward neutral, indicating that selling pressure may be diminishing.

Liquidity conditions further emphasize the disparity. Gold’s market breadth has declined to the point where it now lags behind bitcoin, marking a reversal of the typical relationship. Silver’s liquidity has weakened further, with thinner market depth worsening recent price fluctuations, the report concluded.

The largest cryptocurrency was trading around $69,000 at the time of this report. Gold was priced at approximately $4,450 per ounce, while silver was at $69 per ounce.

Read more: Wall Street broker Bernstein calls bitcoin bottom, maintains $150,000 year-end target