Bitcoin's Rollercoaster Week: Prices Soar, Fed's Role, and Trump's Plans

Bitcoin ended the week on a high note, reaching over $105, 000 right before Donald Trump's second-term inauguration. At the start, it was slumping, dipping below $90, 000 due to Fed interest rate concerns. Inflation data on Wednesday showed a rise, which raised hopes for another Fed rate cut. Bitcoin thrives in low interest environments, so if rates drop, it could attract more investors. The coin rallied to $99, 000, then climbed back over $100, 000. News of Trump's crypto-friendly orders on his first week in office also boosted the price. A lot of money is flowing into Bitcoin through new exchange-traded funds (ETFs). Big economies like the U. S. have the most financial clout, and significant ETF flows can sway market sentiment. At the week's start and end, millions left these funds due to Fed uncertainty. But on Wednesday, $755 million poured in, followed by $626 million on Thursday, and even more on Friday. The bitcoin mining difficulty hit an all-time high of 110. 45 trillion. This makes it tougher than ever to mine new blocks. In mining, computers worldwide race to solve complex problems to add new blocks to the blockchain. If it gets harder, the network is functioning as intended. In other news, the Department of Justice wants to return around 90, 000 stolen Bitcoin from the 2016 Bitfinex hack to the exchange. This Bitcoin, worth over $12 billion today, was stolen by Ilya Lichtenstein and his wife, Heather "Razzlekhan" Morgan. Bitfinex had already compensated customers, but not everyone agrees, especially with Bitcoin's recent value jump. SEC Chair Gary Gensler is stepping down. He views many cryptocurrencies as unregulated securities, but he thinks Bitcoin could be traded like gold. Trump plans a crypto-related executive order to help the industry. Finally, Coinbase restarted Bitcoin-backed loans, allowing investors to borrow USDC stablecoins using Bitcoin as collateral.