Bitcoin dropped in Asian trading on Friday after a brief surge past the $100,000 mark, as traders took profits ahead of key U.S. economic data that could provide further guidance on interest rates.
The world’s largest cryptocurrency reached record highs on Thursday, fueled by growing optimism over potential crypto-friendly regulations under incoming President Donald Trump. Traders were particularly encouraged by Trump’s selection of a pro-crypto candidate to lead the Securities and Exchange Commission.
Bitcoin fell 4.5% to $97,830.3 by 00:43 ET (05:43 GMT), having dropped as low as $91,000 after hitting an all-time high of $103,719.4.
Broader crypto market moves were muted on Friday, with traders awaiting key nonfarm payrolls data later in the day for more clarity on U.S. interest rates.
Trump appoints David Sacks as White House AI and crypto czar
In line with his trend of crypto-friendly cabinet appointments, Trump announced on Thursday that venture capitalist David Sacks will take on a new role advising the White House on crypto and AI regulation.
This follows the creation of a crypto advisory council, and Trump’s picks for Treasury Secretary and Secretary of Commerce have also been seen as supporters of deregulation and digital assets.
Earlier this week, Trump nominated former SEC Commissioner Paul Atkins to lead the agency. Atkins is known for his pro-crypto stance and is expected to reduce or end the SEC’s two-year regulatory crackdown on the crypto industry.
Citi warns Bitcoin’s dominance may diminish under friendlier regulations
Citi analysts recently noted that while there are positive regulatory and macroeconomic trends for crypto, Bitcoin’s dominance in the market could decrease as the industry gains clearer regulations.
Citi stated that regulatory clarity could pave the way for more crypto use cases, allowing smaller coins and tokens with practical applications to gain traction. They pointed out that Bitcoin, already classified as a commodity, is limited in its use cases.
“Over the long term, we believe a network’s utility and value will be determined by usage, macroeconomic correlations, and production costs,” Citi analysts said, adding that this shift would benefit other cryptocurrencies more than Bitcoin. The brokerage also echoed the views of several peers by downplaying Bitcoin’s potential as a reserve asset.
Crypto price update: Altcoins mirror Bitcoin losses, but on track for a strong week
Most broader crypto prices followed Bitcoin’s downward trend on Friday, but they were still set to outperform Bitcoin for the week.
The second-largest cryptocurrency, Ether, rose 1.8% to $3,918.19 and was up 3.5% for the week.
XRP, which saw significant gains due to speculation surrounding the next SEC head, also rose 1.8%, bringing its weekly gain to 21%, marking its fifth consecutive week of strong performance.
XRP reached a six-year high amid speculation that the SEC might drop its long-standing lawsuit against Ripple, the company behind XRP.
Solana, Cardano, and Polygon showed little movement on Friday. Meanwhile, among meme tokens, Dogecoin fell 2.1%.
