Bitcoin ETF Inflows Surge Amid Political Tensions and Market Instability

Bitcoin ETFs in the U.S. hit a three-month high in inflows, totalling $381.4 million on April 21. The surge is attributed to political tensions involving President Trump and Fed Chair Powell, as well as market instability impacting traditional assets. While Bitcoin ETFs thrived, Ethereum ETFs faced ongoing outflows, indicating a shift in capital towards Bitcoin and a response to concerns regarding monetary policy and inflation.

Spot Bitcoin exchange-traded funds (ETFs) in the United States have experienced their largest daily inflows in three months, driven by increased risk appetite following President Donald Trump’s threats to dismiss Federal Reserve Chair Jerome Powell. On April 21, the 12 spot Bitcoin ETFs accumulated $381.4 million in net inflows, marking a 250% increase over the previous day and the highest figure since January 30, according to SoSoValue data.

Leading the inflows was ARK 21Shares’ ARKB, which attracted $116.13 million, closely followed by Fidelity’s FBTC with $87.61 million. Additional inflows saw Bitwise’s BITB and BlackRock’s IBIT raising $45.08 million and $41.62 million respectively, while VanEck’s HODL and Franklin Templeton’s EZBC brought in $11.72 million and $10.1 million. Grayscale’s GBTC and BTC funds also contributed, with inflows of $36.6 million and $32.55 million.

However, Ethereum ETFs faced continued challenges, recording outflows of $25.42 million, following an eight-week bearish trend with nearly $910 million total losses. Last week’s turnaround, which added $15.85 million, appeared to enhance demand from institutional investors.

This significant influx corresponds with Trump publicly denouncing Powell on Truth Social, suggesting Powell’s termination is overdue, following comments about delaying interest rate reductions. Trump’s team is reportedly examining legal means to facilitate Powell’s removal, exacerbating concerns over monetary stability.

In parallel, increasing trade tensions between the U.S. and China paired with ongoing inflation worries have propelled gold prices to new highs, with Bitcoin’s value reflecting these trends. Investors are seeking safety in both assets amidst a turbulent market environment.

Following the reopening of U.S. markets after the Good Friday holiday on April 21, market sentiment remained low, leading to declines in the S&P 500 and Nasdaq of 2.4% and 2.5% respectively. In contrast, Bitcoin maintained its strength, surpassing $88,500 on Tuesday and pushing its market capitalisation beyond $1.75 trillion for the first time since late March.

Additionally, gold prices surged above $3,450 per ounce during Asian trading on April 22, achieving consecutive all-time highs as investors shifted capital away from stocks. Komodo’s Chief Technology Officer, Kadan Stadelmann, attributed the inflows to shifting investor behaviour, indicating a declining confidence in traditional financial systems.

Stadelmann noted that as fiat currencies are seen as lacking intrinsic value, and with trust in the dollar diminishing, investors gravitate towards Bitcoin—a perceived safe haven. Factors such as Trump’s advocacy for aggressive monetary policy adjustments only heighten anxieties regarding financial stability, thus favouring Bitcoin as an alternative asset amidst the existing trade conflict.