Bitcoin Retreats Below $78K After ETF-Fueled Rally Fades

Bitcoin pulled back on Friday afternoon, ending a strong rally previously driven by ETF inflows. As of Friday afternoon New York time, bitcoin was trading at $77,379, down more than 3% over the past 24 hours, after hitting a high of $81,281 earlier this week. Federal Reserve Chair Kevin Warsh, in his first major speech since taking office, said there is "more work to do" in the fight against inflation, cooling market sentiment. The earlier rally was primarily driven by fund flows. U.S. spot bitcoin ETFs saw net inflows of $1.14 billion this week, with cumulative inflows exceeding $3 billion over the past nine days, with BlackRock's iShares Bitcoin Trust capturing the largest share. Last week, the U.S. Treasury Department's announcement that it would double the size of its liquidity support repurchase operations also boosted bitcoin's gains. Analysts believe this rally is closely tied to the "currency debasement trade"—with investors viewing bitcoin as a hedge against currency depreciation and excessive government spending. The total U.S. national debt surpassed the $40 trillion mark for the first time this month, further reinforcing market concerns over the dilution of fiat currency purchasing power.