Bitcoin’s Wild Ride: Tariff Fears Fade as ETF Inflows Fuel Recovery Above $88K

The cryptocurrency market experienced a rollercoaster ride on Tuesday, initially plunging into a sea of red following President Trump’s announcement of secondary tariffs. A $60 billion outflow dragged the market capitalization below the crucial $3 trillion mark, with Bitcoin retracing from a 17-day peak of $88,700 towards $87,100.

The tariff news, which sent ripples of fear across global financial markets, triggered a rapid sell-off, highlighting the crypto market’s sensitivity to macroeconomic events. However, amidst the turmoil, a beacon of resilience emerged: Bitcoin ETFs. Despite the widespread bearish sentiment, these investment vehicles continued to attract substantial inflows, adding another $84 million on Monday and marking a seven-day streak of positive flow. This consistent institutional interest provided a crucial counterweight to the prevailing fear.

Adding to the complexity, the movement of 11,000 BTC by the defunct exchange Mt. Gox introduced a layer of uncertainty, hinting at potential downward volatility. Meanwhile, the altcoin market largely mirrored Bitcoin’s decline, with many traders opting to secure profits in the face of the tariff-induced jitters. However, the BNB chain bucked the trend, demonstrating remarkable resilience with a 1.2% increase, driven by the launch of a Trump-backed USD1 stablecoin. BlackRock’s move to launch an ETP in Europe, offering an initial fee discount, further signaled growing institutional interest in the sector.

Despite the initial shockwaves, Bitcoin staged a remarkable recovery, surging above $88,000 at the time of writing, up 0.90%. This rebound underscores the dynamic nature of the cryptocurrency market, where fear and uncertainty are often met with swift and powerful recoveries.

The ongoing ETF inflows appear to have played a significant role in this resurgence, demonstrating the growing influence of institutional investors.

While the market remains susceptible to external shocks, the resilience shown by Bitcoin suggests a maturing asset class capable of withstanding significant challenges.