Bitcoin ETFs Attract $2.5 Billion Inflows as Price Hits $111,000

Bitcoin ETFs have attracted 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.

The recent spike in investments was largely driven by the IBIT exchange-traded fund, issued by the world’s largest asset manager. On Thursday alone, IBIT recorded an astonishing $877 million in inflows, marking the largest single-day inflow for any ETF in history. This buying frenzy was attributed to the excitement surrounding Bitcoin’s new peak.

The cryptocurrency’s rise can also be partially attributed to geopolitical developments. Last week, a 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 threats to impose additional tariffs on the European Union, illustrating the volatility that often accompanies Bitcoin trading.

The financial markets faced turbulence earlier in April when a series of tariffs on nearly all foreign imports were announced, 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, a 90-day pause on most tariffs was authorized, 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, 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.”