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Bitcoin ETFs have garnered over $2.5 billion in investments this week, coinciding with the cryptocurrency’s ascent to a new all-time high of $111,000 after a challenging close of the year’s first quarter. This surge in inflows signals renewed investor confidence in Bitcoin as it rebounds from recent lows of $74,000 reached earlier in April.
Bitcoin ETFs Soar
According to a report by Fortune Magazine, the recent spike in investments was largely driven by the IBIT exchange-traded fund, issued by the world’s largest asset manager BlackRock.
On Thursday alone, IBIT recorded an astonishing $877 million in inflows, marking the largest single-day inflow for any ETF in history. Eric Balchunas, an ETF analyst at Bloomberg, noted on X, “$IBIT was #1 among ALL ETFs in flows yesterday,” attributing the buying frenzy to the excitement surrounding Bitcoin’s new peak.
The cryptocurrency’s rise can also be partially attributed to geopolitical developments. Last week, President Trump announced a rollback of tariffs on Chinese imports, reducing them from 145% to 30%.
This significant de-escalation in the ongoing trade war between the US and China contributed to a surge in Bitcoin’s price. However, the currency saw a slight decline to around $108,640 on Friday after Trump threatened to impose additional tariffs on the European Union, illustrating the volatility that often accompanies Bitcoin trading.
A Safe Haven Against Fiat Debasement
The financial markets faced turbulence earlier in April when Trump announced a series of tariffs on nearly all foreign imports, in addition to a baseline 10% tariff.
This led to a sell-off of riskier assets like Bitcoin and equities, as investors grew concerned about inflation and disruptions to global supply chains.
In a bid to stabilize the situation, Trump subsequently authorized a 90-day pause on most tariffs, while maintaining some on Chinese imports as negotiations continued with various countries further contributing to the broader crypto market’s recent recovery.
Amid ongoing trade talks and a volatile stock market, Bitcoin has shown resilience, steadily climbing in value. Some crypto industry leaders argue that this divergence from traditional markets underscores Bitcoin’s role as a valuable currency shielded from inflation, as it operates independently of centralized authorities.
Matt Hougan, chief investment officer at the exchange-traded fund issuer Bitwise, emphasized the cryptocurrency’s effectiveness as an inflation hedge, likening it to gold. He remarked, “Bitcoin is proving its mettle as a macro hedge against fiat debasement at the exact moment the world is waking up to the need for that hedge.”
Featured image from DALL-E, chart from TradingView.com
