Trump's Tariff Pause Sparks $340M Bitcoin ETF Inflows

Bitcoin ETFs rebounded on February 4, 2025, following President Donald Trump's decision to pause tariffs on Mexico and Canada. According to data from Farside Investors, the 12 spot Bitcoin ETFs recorded a net inflow of $340.7 million, marking a significant shift from the outflows recorded the previous day.

BlackRock’s IBIT led the inflows with $249 million entering the fund, while ARK and 21 Shares’ ARKB followed with $56.1 million. Other ETFs, such as Grayscale’s GBTC and Bitwise’s BITB, also experienced net positive flows. The remaining seven ETFs reported no inflows or outflows, indicating a pause in investor activity for those funds.

The resurgence of inflows into the 12 Bitcoin ETFs coincided with President Trump's agreement with the presidents of Mexico and Canada to suspend the controversial 25% tariffs on both nations for one month. Additionally, Trump signed an executive order to establish a first-of-its-kind sovereign wealth fund, sparking speculation within the crypto community that the U.S. may use it to purchase Bitcoin.

Following the news, Bitcoin briefly reclaimed the $100,000 key level on February 4, while Ethereum, Solana, XRP, and Dogecoin also posted significant gains. This signals a potential bullish resurgence in the crypto market, which had previously experienced a market-wide decline leading to over $2 billion in liquidations in the crypto derivatives market on Monday.

The recovery comes after the crypto market briefly shed over $500 billion on February 3, fueled by fears of a global trade war following Trump's tariff announcement on Canada, Mexico, and China. At press time, Bitcoin (BTC) was exchanging hands at $98,070, down 1.3% over the past day.

Matt Mena, crypto research strategist at 21Shares, commented on the recent scenario, suggesting that while the tariffs have caused short-term volatility, they may contribute to a longer-term shift that ultimately benefits Bitcoin. If the U.S. seeks to weaken the dollar's overvaluation while maintaining cheap borrowing costs, it could lead to increased pressure on the Fed to cut rates, creating a more accommodative monetary environment