The world’s biggest cryptocurrency was still sitting on stellar gains for the week, as it notched record highs above $90,000 on bets that U.S. regulations will favor crypto under Trump.
Bitcoin fell 2.6% to $87,634.6 by 00:26 ET (05:26 GMT), after hitting a record high of $93,226.6 earlier in the week. Markets were now watching for the crypto to cross $100,000, which is seen as a key level.
Bitcoin was set to add about 14% this week- its best weekly performance since late-February. The coin was also headed for a third straight week of gains.
Gains in Bitcoin were driven chiefly by optimism over a Trump presidency, after he won the 2024 presidential elections. Institutional inflows into crypto exchange-traded funds were seen as a major driver of recent price gains.
Trump has vowed to enact more crypto-friendly regulation, and has also floated the possibility of a national Bitcoin reserve.
But optimism over Trump now appeared to have cooled, especially as traders now awaited more clarity on what his policies will entail.
Trump is also expected to enact expansionary policies that could push up inflation and keep interest rates relatively high in the coming years.
Crypto’s recent rally was stalled by heightened uncertainty over U.S. interest rates, especially after a series of strong consumer and producer inflation readings for October.
The readings were followed by comments from Federal Reserve Chair Jerome Powell, who said that resilience in the U.S. economy gave the central bank more time to consider further interest rate cuts.
Traders were seen scaling back bets on a December rate cut following Powell’s comments, which also sparked losses in broader risk-driven assets. Wall Street retreated from record highs in the past two sessions.
The dollar and Treasury yields rose sharply this week, further pressuring risk assets.
Broader cryptocurrency prices retreated tracking Bitcoin, but were mostly set for strong gains this week. World no.2 crypto Ether fell 5.4% to $3,050.79.
Dogecoin was a standout performer this week, up 65% and headed for its best week since October 2022. Social media buzz around the token rose after Trump announced the formation of the Department of Government Efficiency (DOGE), which will be led by Elon Musk and Vivek Ramaswamy.
SOL, XRP, MATIC and ADA moved in a flat-to-low range on Friday, but were all sitting on strong gains over the past week.
Source: Cryptocurrency - investing.com
