The cryptocurrency market is ending this week with remarkable positivity, driven by a series of favorable developments that have sparked waves of optimism. The highlight of the week was a record-breaking $1.38 billion in net inflows into Bitcoin ETFs on Thursday, following the election of Donald Trump as the President of the United States. Bitcoin continues to surge, consistently achieving new high prices.
ETF Inflows and Fed Rate Cut Propel Bitcoin to New Highs
Leading the charge in ETF inflows was BlackRock’s IBIT, which attracted over $1.1 billion in net inflows. This marks the highest level of inflows since the ETF’s inception in January. Cumulatively, net inflows across all Bitcoin ETF products surpassed the $25 billion mark for the very first time, with none of the twelve ETFs experiencing any net outflows.
Adding to the momentum, a widely anticipated 25 basis points (bps) Federal Reserve rate cut served as a catalyst, propelling Bitcoin’s price to an impressive $77,000 this morning. This rate cut typically enhances the appeal of risk assets like Bitcoin by boosting liquidity and weakening the dollar, further fueling the cryptocurrency’s upward trajectory.
Ether (ETH) ETFs also witnessed significant activity, logging $78 million in net inflows following Trump’s presidential victory. As a result, ETH saw a more than 10% increase in value on Thursday. Investors are optimistic about potential pro-crypto policies and deregulation under the Trump administration, which is boosting confidence in the cryptocurrency sector.
Are Investors Pulling Back?
Despite the buoyant sentiment in the crypto market, there are indications that some investors are beginning to exercise caution regarding “Trump trades.” The dollar has reversed many of its post-election gains, and Treasury yields have settled back into their recent ranges after a brief period of volatility.
As markets evaluate the implications of Trump’s proposed 60% tariff on China and fiscal concerns, including the rising national debt, Bitcoin may be perceived as carrying less risk premium compared to equities. This potential shift could position Bitcoin to outperform various other risk-on assets.
Sustained Bullish Sentiment in Bitcoin
The sustained bullish sentiment in Bitcoin is creating what some analysts describe as a ‘feedback loop.’ Rising ETF inflows are driving up Bitcoin prices, which in turn attracts more retail capital and systematic fund investments as market volatility diminishes.
The aftermath of Donald Trump’s election victory has ignited a remarkable surge in the cryptocurrency market. Bitcoin has soared beyond $76,400, establishing a new all-time high, while Ethereum has climbed above $2,839, and Solana is approaching $190. This surge reflects the optimism surrounding Trump’s perceived pro-crypto stance, which is expected to create a more favorable regulatory environment for digital assets.
As the crypto market continues to evolve, stakeholders remain hopeful that these positive trends will pave the way for sustained growth and stability in the digital asset landscape.
