Bitcoin falls after $3 billion ETF-driven surge

Bitcoin traded at $77,379 Friday afternoon in New York after falling more than 3% over 24 hours. Bitcoin reached a weekly high of $81,281 before slowing after Federal Reserve Chair Kevin Warsh delivered his first major speech as central bank head. Warsh said Friday that he had more work to do to fight inflation. Bitcoin has previously fallen when the Federal Reserve viewed inflation as too high. That view reduces the likelihood of a rate cut. Bitcoin has typically performed better in a low-interest-rate environment. Bitcoin began surging last week after a Treasury plan to at least double the size of its liquidity-support buyback operations. The announcement weakened the dollar. Non-yielding assets benefited. U.S. Bitcoin ETFs managed by BlackRock, Fidelity, and Grayscale recorded net inflows for nine consecutive days, according to Farside Investors data. The funds had their strongest week since October, when Bitcoin reached a new all-time high. Investors put more than $3 billion into the funds since August 17. BlackRock's iShares Bitcoin Trust received the largest share of the investment. Morgan Stanley's new Bitcoin Trust also recorded significant inflows after debuting this year. Analysts said the debasement trade was leading investors to consider Bitcoin again. The strategy involves buying assets as a hedge against a currency losing value. Investors using the strategy view Bitcoin, gold, and other precious metals as protection against excessive government spending. Total U.S. debt crossed $40 trillion for the first time this month.