Spot Bitcoin ETF investors increased exposure to crypto assets as the crisis in West Asia continued. In March, the products attracted net monthly inflows of as much as $1.3 billion.
And the appetite did not diminish in April, even when President Donald Trump threatened to “destroy civilization” against Iran. In fact, during Trump’s threat on April 6, the products attracted $471.3 million in daily net inflows, the highest since February.
Interestingly, BTC rose about 8% last month, while gold lagged 5.4%. In other words: BTC became a safe haven during the crisis. And investors remain optimistic and may expect higher returns as the crisis deepens.
So what’s next after the US-Iran ceasefire and the possible end of the war?
Will a Short Squeeze Lift BTC Higher?
On Wednesday, April 8, during early Asian market hours, bears suffered huge losses following the US-Iran ceasefire. CoinGlass data shows $424 million worth of Bitcoin shorts wiped out in the last 24 hours [BTC] bears suffer a loss of $164 million.
The short squeeze quickly increased BTC from $67.7K to $72K.
Interestingly, André Dragosch, head of research at Bitwise, had previously predicted that the huge short cover could be a ‘dry powder’ for a leg higher.
He cited record bearish BTC positioning by institutions on the CME, which was the highest since 2023.
What’s next for BTC after Iran’s ceasefire?
But in the short term, if the West Asian crisis is resolved, the market’s focus would shift back to macro factors.
The US PCE inflation data, due April 9, could drive volatility in Bitcoin. This measure is the Federal Reserve’s preferred inflation gauge and often shapes interest rate expectations.
Markets have already priced in the possibility of an aggressive pause ahead of the April FOMC meeting.
Meanwhile, Wednesday’s rally saw $257 million in profit-taking, continuing the pattern of recent weeks.
However, Bitfinex analysts called it “modest” to make a dent in BTC, emphasizing that inflation could determine the next direction for the crypto asset.
Traders take profits, but the reaction is modest against this move, indicating limited conviction rather than true distribution. PCE on April 9 is the next test.
Final summary
- US Spot BTC ETFs have seen massive inflows of $1.3 billion in March as the crypto assets remained resilient during the West Asian crisis.
- Bitfinex analysts warned that the recent BTC recovery will be tested ahead of US inflationary pressures on Thursday.