Bitcoin saw a significant surge, briefly surpassing $105,000 just before Donald Trump’s swearing-in as a crypto-friendly president. After a slow start, the price dipped below $90,000, influenced by cautious trading related to Federal Reserve interest rate policies. However, a 2.9% rise in the consumer price index for December hinted at rising inflation, prompting speculation about potential Fed rate cuts, which historically favor Bitcoin. This optimism helped Bitcoin rebound above $100,000, bolstered by Trump’s plans for crypto-related executive orders aimed at supporting the industry.
Investor sentiment shifted dramatically, with an influx of funds into Bitcoin ETFs after initial withdrawals, totaling over $626 million on Thursday alone. Meanwhile, Bitcoin mining difficulty reached new heights, reflecting a competitive environment yet stable network performance. In other news, the Department of Justice announced the recovery of stolen Bitcoins from the 2016 Bitfinex hack, potentially returning about 90,000 Bitcoins to the exchange.
SEC Chairman Gary Gensler, stepping down, expressed that while many cryptocurrencies may be unregulated securities, Bitcoin might eventually be treated like a commodity. On the operational side, Coinbase has resumed offering Bitcoin-backed loans, allowing users to borrow USDC stablecoins against their Bitcoin, facilitated through a partnership with Morpho.
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