Bitcoin exchange-traded funds (ETFs), a stock market investment that tracks the price of Bitcoin, attracted over $2.5 billion in investments this week as the original cryptocurrency rebounded to new highs.
Bitcoin ETFs saw their largest inflows in weeks as the underlying currency reclaimed its recent losses and achieved a new all-time high of $111,000 on Thursday. IBIT, the Bitcoin ETF issued by asset management giant BlackRock, raked in $877 million on Thursday, the largest single day inflow of any ETF in history, according to Eric Balchunas, an ETF analyst at Bloomberg.
“$IBIT was #1 among ALL ETFs in flows yesterday,” Balchunas wrote on X on Friday. He attributed the buying action to excitement around Bitcoin’s new all-time high, saying the achievement is “a byproduct of the ATH-induced feeding frenzy volume.”
Bitcoin climbed to new highs after President Trump rolled back tariffs on Chinese imports from 145% to 30% last week, a significant de-escalation of the looming trade war between the two nations. However, the currency has tumbled to $108,000 on Friday as Trump threatened to impose additional tariffs on the European Union.
Financial markets were hit hard in early April when Trump announced a slew of markups on nearly all foreign imports in addition to a 10% baseline tariff. Following the announcement, investors fled risky assets like Bitcoin and equities amid fears that the tariffs would increase inflation and disrupt global supply chains. However, as Bitcoin fell alongside a historic stock market meltdown, Trump authorized a 90-day pause on most tariffs—keeping in place ones on Chinese imports and the 10% baseline levy—as he negotiates with foreign nations.
Since then, the stock market has remained volatile as Trump engages in trade talks with China, the United Kingdom, the European Union, and others, but Bitcoin has continued to steadily rise. Some crypto industry leaders argue that Bitcoin’s divergence from the stock market proves its value as a currency detached from inflation because it is not governed by a centralized entity.
Matt Hougan, chief investment officer at ETF issuer Bitwise, told Fortune that Bitcoin is an efficient inflation hedge, much like gold. Investors are rushing to Bitcoin ETFs to protect their portfolios against inflation and other macroeconomic factors that plague traditional fiat-currencies, he said.
“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,” Hougan said.