Shares in Trump’s social media company spike after president-elect says he won’t sell stake

(NEW YORK) — The price of bitcoin dropped below $100,000 late Thursday, just a day after topping the milestone for the first time.

The world’s largest cryptocurrency continued to slide in early trading on Friday, before recovering some of the losses.

The turmoil for bitcoin did not appear to impact other major crypto coins. Ether, the second-largest cryptocurrency, climbed nearly 5% in early trading on Friday, exceeding $4,000 for the first time since March.

The turn of fortune for bitcoin interrupted a rally set off by the election of former President Donald Trump, who is viewed as friendly toward cryptocurrency.

Since Election Day, the price of bitcoin has climbed nearly 50%. That performance far outpaces the S&P 500, which has risen about 5% over the same period.

Bitcoin has proven highly volatile since its launch about 15 years ago.

As recently as 2021, bitcoin suffered a downturn that cut its value in half. The same thing happened a year earlier, when the initial outset of the pandemic triggered a panic among investors.

“As long as the narrative stays positive, there’s always room to grow,” Bryan Armour, the director of passive strategies research at financial firm Morningstar, told ABC News before bitcoin reached $100,000.

“It’s still a highly volatile asset,” Armour added.

A surge had propelled bitcoin past $100,000 late Wednesday, just hours after Trump nominated crypto booster Paul Atkins to chair the Securities and Exchange Commission.

Atkins, the CEO of consulting firm Patomak Partners, serves as co-chair of the Token Alliance, a cryptocurrency advocacy organization.

Once a crypto critic, Trump has vowed to bolster the cryptocurrency sector and ease regulations enforced by the Biden administration. Trump has also promised to establish the federal government’s first National Strategic Bitcoin Reserve.

In a post on Truth Social early Thursday, Trump took credit for the gains: “CONGRATULATIONS BITCOINERS!!! $100,000!!! YOU’RE WELCOME!!!.”

Trump has not spoken publicly about bitcoin since it fell below $100,000.

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(NEW YORK) — The price of bitcoin has tumbled about 12% from a record high reached earlier this week.

After topping $108,000 for the first time on Tuesday, the world’s largest cryptocurrency dropped to a price below $93,000 in early trading on Friday. Bitcoin soon recovered some of those losses, settling around $95,000 at 9:30 a.m. ET.

The selloff rippled through the wider cryptocurrency market. Ether, the second-largest cryptocurrency, ticked down about 1%. Lesser-known dogecoin fell 4% and crypto-trading exchange Coinbase fell nearly 2%.

The slide for bitcoin has largely come after the Federal Reserve announced late Wednesday that it expects fewer interest rate cuts next year.

Lower interest rates typically stimulate economic activity, drive up corporate profits and lift the value of forward-looking assets like stocks and cryptocurrencies. In theory, a longer-than-expected period of high interest rates could diminish those returns.

The Fed’s forecast sent stocks falling within minutes and helped push bitcoin to its lowest level in weeks.

The recent slide for bitcoin erases some of the gains enjoyed since the election of former President Donald Trump, who is widely viewed as friendly toward cryptocurrency. Still, the price has climbed about 36% since Election Day.

Bitcoin had climbed to a new high earlier this week after Trump reaffirmed support for a U.S. bitcoin strategic reserve.

A U.S. bitcoin strategic reserve would amount to a substantial government holding of bitcoin similar to the country’s stockpile of oil or gold. Bitcoin bulls expect such a potentially large acquisition of bitcoin to drive up demand and hike the price.

Supporters of a bitcoin strategic reserve also say the asset would help diversify the nation’s financial holdings, protecting it from the possible decline in value of other assets, such as the U.S. dollar.

Since the price of bitcoin is highly volatile, a large purchase of the asset could end up threatening the nation’s financial stability rather than safeguarding it, some critics say.

The major stock indexes rebounded on Thursday, recovering some of the losses they took after the Fed’s unwelcome forecast.

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(WASHINGTON) — A fresh inflation reading this week flashed a warning: Price increases are rising again, just when the Federal Reserve had appeared close to declaring “mission accomplished” in its yearslong fight to lower them.

In theory, the trend would prompt the Fed to raise rates, or at least hold them steady, when central bankers meet next week. High interest rates, after all, are the main tool the Fed has used to ratchet inflation down from its pandemic-era heights.

Instead, investors peg the chances of a rate cut next week at an overwhelming 98%, according to the CME FedWatch Tool, a measure of market sentiment.

The reason is clear, experts told ABC News: Interest rates will remain historically high even after a small cut. The Fed likely does not view a mild uptick of inflation this fall as enough to deviate from a path of rate cuts it laid out earlier this year, they added.

“I don’t think the recent inflation has diverged enough from what the Fed expected to change its outlook,” William English, a professor of finance at Yale University and a former Fed official, told ABC News.

Consumer prices rose 2.7% in November compared to a year ago, marking two consecutive months of rising inflation, government data this week showed.

Inflation has slowed dramatically from a peak of more than 9% in June 2022. But the recent uptick has reversed some progress made at the start of this year that had landed price increases right near the Fed’s target of 2%.

That progress had helped nudge the Fed toward its landmark shift to interest rate cuts.

In recent months, the Fed has cut its benchmark rate three-quarters of a percentage point, dialing back its fight against inflation and delivering some relief for borrowers saddled with high costs.

Even after the cuts, the benchmark rate stands between 4.5% and 4.75%, its highest level in nearly two decades. The high interest rates have kept borrowing costs high for everything from credit cards to mortgages.

The average interest rate for a 30-year fixed mortgage stands at nearly 6.7%, well above an average rate four years ago of 2.6%, Freddie Mac data shows.

A small rate cut by the Fed would not meaningfully reduce mortgage payments for new loans, Yeva Nersisyan, a professor of economics at Franklin & Marshall College, told ABC News. In turn, the rate decision poses little risk of boosting demand for big-ticket items, like homes, which make up prices most immediately sensitive to lower rates. Other prices operate on a prolonged lag in response to changes in interest rates, she added.

“In that sense, a quarter of a percentage point cut or not really wouldn’t make a difference for inflation,” Nersisyan said.

The anticipated rate cut also reflects the Fed’s consideration of employment, which makes up the other component of its dual mandate besides inflation, English said. The unemployment rate has increased this year from 3.7% to 4.2%, though it remains at a historically low level. Hiring has slowed down but remained solid.

Lower interest rates are meant to stimulate economic activity over the long term, keep the economy growing and safeguard the labor market.

“They’ve been trying to balance two risks: One is that the economy slows more than they thought, and the other is that inflation proves more stubborn than they thought,” English said.

Still, experts cautioned that the recent uptick in inflation may delay or alter plans for rate cuts next year.

“Starting next year, they probably will take a more cautious outlook,” Nersisyan said.

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