Bitcoin Drops Below $78,000 Following ETF-Powered Rally

ChainCatcher report: Bitcoin retreated in the afternoon on Friday, ending a strong rally previously driven by ETF inflows. As of Friday afternoon in New York, Bitcoin traded at $77,379, down more than 3% over the past 24 hours, after reaching a high of $81,281 earlier this week. Market sentiment cooled following remarks by Federal Reserve Chair Kevin Warsh in his first major speech since taking office, where he stated that “more work remains” to combat inflation. The prior rally was primarily fueled by capital inflows: U.S. spot Bitcoin ETFs recorded net inflows of $1.14 billion this week, with cumulative inflows exceeding $3 billion over the past nine days—led by BlackRock’s iShares Bitcoin Trust. Bitcoin’s upward momentum was also supported last week by the U.S. Treasury’s announcement to double the size of its liquidity-supporting repurchase operations. Analysts believe this rally is closely tied to a “currency debasement trade,” with investors viewing Bitcoin as a hedge against currency depreciation and excessive government spending. The total U.S. national debt surpassed $40 trillion for the first time this month, further intensifying market concerns about the erosion of fiat currency purchasing power.