Bitcoin experienced a slight dip on Friday as its recent rally past key levels lost momentum, with traders remaining cautious ahead of the Federal Reserve’s rate decision next week.
The world’s largest cryptocurrency surged on Thursday after President-elect Donald Trump reiterated his commitment to making the U.S. a global leader in cryptocurrency. However, the rally quickly fizzled out as he did not provide any significant policy insights.
Bitcoin dropped 0.7% to $99,961.4 by 00:30 ET (05:30 GMT).
Fed Anticipation Strengthens Dollar, Pressures Crypto
Attention has now shifted to the Fed’s upcoming rate decision, with the central bank widely expected to reduce interest rates by 25 basis points.
However, uncertainty over the Fed’s long-term rate outlook has increased, particularly after November’s producer inflation data came in higher than expected, while consumer inflation remained stubbornly high.
The dollar strengthened in response, putting pressure on risk-driven assets, including cryptocurrencies. Traders are now anticipating a slower pace of rate cuts in 2025.
Higher interest rates reduce the attractiveness of speculative assets like crypto.
Bitcoin and Ether ETFs See Continued Inflows
Recent data from the crypto market indicated that Bitcoin and Ether spot exchange-traded funds (ETFs) continued to see steady inflows through early December, driven by optimism over more favorable regulations under Trump.
Bitcoin ETFs experienced their eleventh consecutive day of inflows as of December 12, with Blackrock’s iShares Bitcoin Trust capturing the largest share.
Spot Ether ETFs also marked their 14th straight day of inflows, with Blackrock and Grayscale ETFs receiving the most investments.ETF inflows indicate rising institutional interest in cryptocurrency, as they provide a safer way for investors to gain exposure to the market. The launch of spot ETFs in U.S. markets earlier this year was seen as a positive development for crypto, with inflows increasing rapidly following Trump’s election victory in early November.
Crypto Prices Today: Altcoins Follow Bitcoin’s Downward Trend
Most major altcoins gave back some of their gains from this week, moving in line with Bitcoin’s losses. However, many altcoins had outpaced Bitcoin in recent weeks, as markets anticipated that favorable U.S. regulations would help cryptocurrencies beyond Bitcoin thrive.
Ether dropped 0.3% to $3,916.31, while XRP fell 3.6% to $2.3458.
Solana, Cardano, and Polygon saw declines between 2% and 7%, while among meme tokens, Dogecoin dropped 2.7%.
