Bitcoin exchange-traded funds (ETFs), which track the price of Bitcoin, have attracted over $2.5 billion in investments this week as the cryptocurrency reached new highs.
These ETFs experienced their largest inflows in weeks as Bitcoin regained its recent losses and hit a new all-time high of $111,000 on Thursday. The Bitcoin ETF issued by asset management giant BlackRock, known as IBIT, garnered $877 million on that day. This marked the largest single-day inflow for any ETF in history, according to ETF analyst Eric Balchunas from Bloomberg.
Balchunas reported on X that IBIT was the leading ETF in terms of flows on the previous day. He attributed this buying activity to enthusiasm surrounding Bitcoin’s new high, describing it as a “byproduct of the ATH-induced feeding frenzy volume.”
Bitcoin’s rise coincided with President Trump’s decision to reduce tariffs on Chinese imports from 145% to 30% last week, easing tensions in the trade war between the two countries. However, the cryptocurrency’s value fell to $108,000 on Friday as Trump threatened additional tariffs on the European Union.
Financial markets faced significant challenges in early April when Trump announced tariffs on nearly all foreign imports, including a 10% baseline tariff. This led investors to retreat from risky assets like Bitcoin and equities over fears of increased inflation and disruptions to global supply chains. Despite a stock market downturn, Trump authorized a 90-day pause on most tariffs, excluding those on Chinese imports and the 10% baseline levy, as negotiations with foreign nations continued.
Since then, the stock market has remained volatile amid ongoing trade discussions with countries such as China, the United Kingdom, and the European Union. In contrast, Bitcoin has continued to rise steadily. Some industry leaders claim that Bitcoin’s resilience demonstrates its value as a currency independent of inflation because it is not controlled by a centralized authority.
Matt Hougan, chief investment officer at ETF issuer Bitwise, told Fortune that Bitcoin serves as an effective hedge against inflation, similar to gold. He noted that investors are turning to Bitcoin ETFs to safeguard their portfolios from inflation and other macroeconomic challenges affecting traditional fiat currencies.
Hougan stated, “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.”
This story was originally featured on Fortune.com.
