Bitcoin is retreating by around 0.7% after yesterday’s gain of more than 2%, struggling to hold the $117,000 level. Altcoins are also leaning lower following notable gains, with Ethereum rising more than 6% to reclaim the $3,900 mark for the first time in ten days.
Bitcoin’s pullback appears to be a correction following the gains driven by President Donald Trump’s decision to open the door to crypto investments within 401(k) retirement plans.
On Thursday, Trump signed an executive order aimed at facilitating the inclusion of alternative assets, such as private equity, cryptocurrencies, and real estate, in America’s most common retirement plans, which currently hold around $12.2 trillion on behalf of more than 90 million savers. The order directs federal regulators, including the Department of Labor, to re-evaluate and clarify existing rules and fiduciary guidelines to support this initiative.
Although there is no explicit ban on such investments, plan administrators have long avoided them due to fears of legal liability stemming from risks like low liquidity and higher fees relative to traditional stocks and bonds. Since they are bound by fiduciary duty to act in the best interest of plan participants, adding assets characterized by opacity, volatility, or high costs could later be seen as imprudent and thus open the door to lawsuits, according to The New York Times.
While it may be too early to assess how appealing these riskier assets will be to conservative retirement savers and plan managers, Thursday’s market reaction was clearly bullish. Spot Bitcoin ETFs saw net inflows of over $280 million, while Ethereum products recorded more than $220 million in positive flows.
Additionally, in a separate development, Trump announced his intention to nominate the head of the Council of Economic Advisers Stephen Miran to fill the vacant seat on the Federal Reserve Board of Governors. The move is part of the administration’s broader pressure campaign to lower interest rates. However, contrary to earlier speculation, Miran is not being positioned as a replacement for Fed Chair Jerome Powell, but rather as a temporary appointee until January. His nomination follows the early resignation of Adriana Kugler, who stepped down five months before her term expired, providing Trump with the opportunity to name her successor.
This appointment has modestly revived hopes of multiple rate cuts this year. According to the CME FedWatch Tool, markets are currently pricing in a probability of over 50% that the Fed will lower rates by a cumulative 75 basis points by year-end. Such growing expectations of easier monetary policy could further fuel the broader market’s bullish trend.
However, in recent hours, the bullish momentum has noticeably slowed, not just in price action, but also in futures market dynamics. The open-interest-weighted funding rate for Bitcoin futures has dropped to its lowest level in nearly a month, signaling a resurgence of seller dominance according to data from CoinGlass.
