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Bitcoin prices dropped in Asian trading on Friday, reversing gains after a brief rally past the critical $100,000 mark. Profit-taking and investor caution ahead of key U.S. nonfarm payrolls data drove the decline, following optimism over pro-crypto signals from President-elect Donald Trump’s administration.
Key Movements:
- Bitcoin Price: Fell 4.5% to $97,830.3, dipping as low as $91,000 after reaching a record high of $103,719.4.
- Broader Crypto Market: Remained largely range-bound, awaiting macroeconomic cues on U.S. interest rates.
Trump Advances Pro-Crypto Agenda with Key Appointments
Trump’s transition team announced the appointment of venture capitalist David Sacks as the White House’s AI and crypto czar, further solidifying the administration’s crypto-friendly stance.
Notable Appointments:
- David Sacks: Tasked with advising on crypto and AI regulation.
- Paul Atkins: Nominated as SEC Chair, expected to ease crypto regulations.
- Advisory Council: Creation of a crypto-focused advisory body signals deregulatory priorities.
These appointments reflect the administration’s intention to position the U.S. as a global leader in crypto innovation while potentially ending the SEC’s stringent regulatory actions.
Analysts Warn of Shifting Bitcoin Dominance
Citi analysts cautioned that while regulatory clarity could benefit the crypto sector overall, Bitcoin’s dominance might wane as altcoins with distinct use cases gain traction.
Key Insights from Citi:
- Regulatory clarity may encourage the adoption of smaller, utility-focused coins.
- Bitcoin’s utility remains limited as it is largely treated as a commodity.
- Analysts downplayed Bitcoin’s potential as a reserve asset, emphasizing network utility over speculative value.
Altcoins Outperform Bitcoin Despite Muted Action
While Bitcoin experienced a notable decline, several altcoins showed resilience, poised for stronger weekly performances.
Altcoin Highlights:
- Ether (ETH): Rose 1.8% to $3,918.19, up 3.5% this week.
- XRP: Gained 1.8%, marking a 21% weekly rise and hitting a six-year high. Speculation over the SEC dropping its lawsuit against Ripple drove gains.
- Solana, Cardano, Polygon: Traded flat on Friday but remain steady.
- Dogecoin: Dropped 2.1%, reflecting broader market caution.
Market Outlook
The crypto market’s direction hinges on the release of U.S. payrolls data and subsequent Federal Reserve policy cues. Bitcoin may face headwinds if investors continue to take profits at psychologically significant levels. However, Trump’s crypto-friendly appointments are expected to bolster longer-term sentiment across the sector.
Altcoins, particularly those offering utility beyond speculative trading, could continue to outperform as regulatory clarity reshapes the market landscape.
