Bitcoin’s recent increase in value is not convincing everyone to invest in it as a safe haven.
Over the past week, Bitcoin witnessed a substantial 10 percent surge, reaching a value close to US$94,000. This remarkable performance since the US presidential election was accompanied by an influx of over US$3.2 billion into exchange-traded funds (ETFs) linked to Bitcoin and Ether. The iShares Bitcoin Trust ETF (IBIT) attracted a substantial portion of this amount, securing nearly US$1.5 billion, marking its most significant weekly total for the year. Additionally, the ARK 21Shares Bitcoin ETF received US$620 million in inflows, while the Fidelity Wise Origin Bitcoin Fund saw US$574 million in new investments.
In a positive turn of events, Ether products experienced their first net inflows since February, as reported by Wintermute Trading Ltd. This upward trajectory in the cryptocurrency market was mirrored in other risk assets, such as the S&P 500, which grew by 4.6 percent the same week, stimulated by optimism surrounding tariffs.
As Bitcoin continues to demonstrate stability throughout the year, contrasting with the S&P 500’s decline of nearly 6 percent, analysts and investors are reconsidering Bitcoin’s status as a safe-haven asset. Some point to Bitcoin’s resilience during previous market turmoils, such as President Donald Trump’s trade disputes, as an indicator of its evolving role as a digital gold substitute. Simon Peters from eToro Group Ltd. highlighted the increase in net spot ETF inflows as an indicator of institutional interest in Bitcoin, suggesting that Bitcoin may be gaining traction as an alternative investment amidst ongoing economic uncertainties.
Recent data shows Bitcoin trading at approximately US$97,500, reflecting a 3.5 percent increase in a 24-hour period. Despite some volatility earlier in the week due to weaker-than-expected US GDP data, Bitcoin experienced a strong rebound alongside significant stock market gains. Anticipation surrounding the release of Friday’s jobs report added to the market sentiment.
Market watchers are keenly observing whether Bitcoin can surpass the critical US$100,000 threshold, a level it last reached on February 7. Other major cryptocurrencies also enjoyed gains during this period, with Ether rising by 5.8 percent, Solana by 7.6 percent, and XRP by 4 percent.
Furthermore, analysts in the crypto space have been assessing the Federal Reserve’s impending policy decisions. Forbes highlighted the 0.3 percent annualized contraction in US GDP during Q1, coupled with a stagnant PCE price index in March, marking its highest level since July 2024. Analysts are now expressing concerns over “stagflation,” triggered by ascending inflation rates and a weakening economy. The expectation of rate cuts commencing in June has implications for the crypto landscape, with markets predicting a potential boost for Bitcoin and other risk assets with this policy shift.
