Investing.com-- Bitcoin fell on Friday and was set for steep losses this week as heightened concerns over slower U.S. interest rate cuts and potential coin sales by the government eroded sentiment towards crypto.
Crypto markets also largely tracked a downturn in broader risk-driven markets, as traders pivoted into safe havens such as gold and the dollar amid heightened economic uncertainty.
The world’s biggest cryptocurrency was also subject to profit-taking after tripling in value through 2024. Broader crypto prices also fell in tandem with Bitcoin.
Bitcoin fell 0.6% to $93,925.0 by 00:56 ET (05:56 GMT). The coin had briefly fallen as low as $92,474.1.
Bitcoin heads for weekly losses
Bitcoin was trading down about 4.4% this week, its worst performance since late-September.
In addition to a broader risk-off sentiment, Bitcoin was also pressured by reports that the Department of Justice had received court approval to sell about $6.5 billion worth of Bitcoin confiscated from the Silk Road black market.
While the DOJ sale represents increased selling pressure on Bitcoin, it also quashed hopes that incoming President Donald Trump would convert the government’s confiscated token holdings into a strategic reserve.
Trump has vowed to enact crypto-friendly regulations and has also floated the possibility of a Bitcoin strategic reserve.
But analysts expressed some doubts over just how he will create the reserve, given that Congress is unlikely to ok any additional fiscal spending on government Bitcoin purchases.
Still, optimism over Trump spurred sharp gains in Bitcoin through late-2024, driving the coin to record highs of over $108,000. Trump was also seen nominating a slew of crypto-friendly candidates to key regulatory roles.
Crypto price today: altcoins dip as nonfarm payrolls loom
Broader crypto prices tracked weakness in Bitcoin, as risk appetite soured in anticipation of key nonfarm payrolls data due later on Friday, which is likely to factor into expectations for interest rates.
The reading comes just days after the minutes of the Federal Reserve’s December meeting reiterated the bank’s outlook for fewer interest rate cuts in 2025, which bodes poorly for risk-driven assets.
World no.2 crypto Ether fell 2% to $3,262.51, while XRP fell 2.3% to $2.2949.
Solana, Cardano, and Polygon fell between 0.8% and 3%, while among meme tokens, DOGE/USD lost 2.8%.