Bitcoin finished the week strong, briefly surpassing $105,000 per coin just before Donald Trump – who has cast himself as a crypto-friendly candidate in the presidential race – was inaugurated for his second term on Monday.
It started the week slowly, however, selling to a two-month low – below $90,000 – as traders were careful on what the Federal Reserve expects for interest rates this year.
But new data abandoned On Wednesday, it was shown that inflation was indeed rising at the end of last year, with the consumer price index rising 2.9% in the 12 months to December. This, traders said, made another Fed rate cut more likely.
Bitcoin tends to do well in a low interest rate environment – or has done so in the past – so if the Fed sees more reason to reduce borrowing costs, then Bitcoin could become more attractive. The asset then surpassed $99,000 before continuing to cross the $100,000 mark and continuing to fly.
News that Trump would publish crypto related orders during his first week in office also helped push the coin to where it is now.
ETF Feed
Much of the money – but not all – flowing into the Bitcoin space comes from investors buying shares in the new exchange-traded funds.
The world’s largest economy has the greatest financial power – and large flows into these products tend to swing market sentiment.
At the start of the week – and at the end of last week – hundreds of millions left the funds, with investors apparently spooked by what the central bank would do next.
But on Wednesday, the tide turned and a total of $755 million hit funds, according to data from Farside Investors. Thursday was also an epic day, with investors pouring another $626 million into investment vehicles, but on Friday they topped them all with
Mining difficulty reaches new heights
The price of Bitcoin isn’t the only thing that increased this week: so did the mining difficulty of the largest cryptocurrency hit a new peak. It currently stands at 110.45 trillion, meaning it is harder than ever to mine a new block.
In the mining world, computers around the world are racing to solve complex mathematical problems in order to add new blocks to the blockchain. And if it becomes more difficult for miners to accomplish this task, then the network is functioning as it should.
Bitfinex Hack Update
Furthermore, the Ministry of Justice said that the Bitcoin recovered and stolen during the famous Bitfinex hack of 2016 should be returned to the exchange.
The federal government says there are no “victims” in the case where Ilya Lichtenstein stole approximately 120,000 Bitcoins (currently worth over $12 billion), while his wife, rapper and social media personality Heather “Razzlekhan” Morgan, helped launder some of the funds.
About 90,000 Bitcoins were ultimately recovered and could return to Bitfinex, which said it gained customers years ago through a refund program. However, not all customers agree with this view, especially with the skyrocketing value of Bitcoin in the years since.
Gensler criticizes crypto, but not Bitcoin
Widely considered the bogeyman of crypto, SEC Chairman Gary Gensler is set to resign and will soon be replaced. In an interview Tuesday, the regulator said CNBC that although it considers many cryptocurrencies to be unregulated securities, Bitcoin could in the future be traded like commodities such as gold.
Referring to how gold has been traded for 10,000 years, he said: “We have Bitcoin. It could also be something else in the future. »
Trump’s executive order
Sources said Decrypt that the new president plans to issue a crypto-related executive order to help the industry on his first day in office. A series of reforms are being considered, some not previously reported, which could include asking regulators to create a crypto task force to be on the same page on the industry.
The new president campaigned on promising to help Bitcoiners and the space as a whole.
Coinbase Bitcoin Loans
And America’s largest crypto exchange, Coinbase, has begin Bitcoin-backed loans again, after stopping them two years ago. The loans allow investors to use their “digital gold” as collateral and instantly borrow up to $100,000 in USDC stablecoin.
The new service will be powered by a third party: Morpho, a lending protocol on Base, the layer 2 Ethereum network incubated by Coinbase.
Edited by Andrew Hayward
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