Bitcoin pulled back on Friday afternoon after a powerful rally fueled by heavy buying from U.S. spot Bitcoin exchange-traded funds (ETFs).
The leading cryptocurrency was trading at $77,379 in New York on Friday afternoon, down more than 3% over 24 hours. Bitcoin reached a weekly high of $81,281 before losing momentum following Federal Reserve Chair Kevin Warsh’s first major speech as head of the central bank. Warsh said Friday that he had “more work to do” to fight inflation.
Bitcoin has historically come under pressure when the Federal Reserve signals that inflation remains too high, reducing the likelihood of interest-rate cuts. The cryptocurrency generally performs better in a lower-interest-rate environment.
JUST IN: U.S. Bitcoin ETFs have brought in $1.14 billion in inflows this week. Over $3 billion has been added in the past 9 days! pic.twitter.com/ri1jE7enTZ
— Bitcoin Magazine (@BitcoinMagazine) August 28, 2026
Bitcoin began surging last week after the U.S. Treasury said it would at least double the size of its liquidity-support buyback operations. The announcement weakened the dollar, while non-yielding assets benefited.
Bitcoin ETFs managed by BlackRock, Fidelity and Grayscale recorded net inflows for nine consecutive days, according to data from Farside Investors. The funds had their strongest week since October, when Bitcoin reached a new all-time high, and the inflow streak continued into this week.
Since August 17, investors have directed more than $3 billion into the funds. BlackRock’s iShares Bitcoin Trust received the largest share of the investment, while Morgan Stanley’s new Bitcoin Trust, which launched this year, also recorded significant inflows.
Analysts have said the so-called debasement trade is encouraging investors to reconsider Bitcoin. The strategy involves buying assets as a hedge against the loss of value in a currency.
Investors participating in the trade view Bitcoin, gold and other precious metals as potential protections against excessive government spending. Total U.S. government debt surpassed $40 trillion for the first time this month.