Bitcoin Fell Below $80,000: Employment Report Fueled Expectations of Fed Rate Hikes
The token fell 2.8% after rising nearly 6% the previous day / Photo: Utoimage / Shutterstock.com
On Friday, Bitcoin plummeted 2.8% from the price recorded at the close of U.S. stock markets on September 3, falling to $79,470, after stronger-than-expected U.S. labor market data once again heightened expectations that the Federal Reserve (Fed) would raise interest rates on September 16. This sharply derailed the cryptocurrency’s latest attempt to consolidate above the $80,000 level, Bloomberg notes.
The day before, Bitcoin jumped nearly 6% to $81,750 at the close of trading on Thursday, after Federal Reserve Board member Christopher Waller called for “giving disinflation a chance” and stated that he was prepared to support keeping the interest rate at its current level at the regulator’s September meeting. The latest downturn marked yet another macroeconomic test for Bitcoin, according to Bloomberg.
Bitcoin fell in tandem with U.S. stocks and rising Treasury yields following the release of the August jobs report. In the report, the U.S. Bureau of Labor Statistics noted that nonfarm payrolls in the United States rose by 162,000 last month, exceeding all forecasts by analysts surveyed by Bloomberg, while the unemployment rate remained at 4.1%.
“A strong rebound in labor market data does not, in and of itself, put an end to the debate [regarding the trajectory of the Fed’s monetary policy], but it does provide additional arguments for the ‘hawks,’ — said Fabian Dori, chief investment officer at Sygnum Bank, to Bloomberg. “Strong data confirm the current likelihood of a rate hike in September. But other sources of liquidity are also important for the markets—Treasury actions, the ability of banks and private lenders to extend credit, as well as the supply of stablecoins,” he added.
On September 4—following the release of new macroeconomic data—traders estimated the probability of a 25-basis-point rate hike at the September meeting at 60.4%, up from 49.4% the previous day, according to CME FedWatch data. The probability of rates remaining unchanged, by contrast, fell from 50.6% to 39.6%. That said, current expectations are only slightly more “hawkish” than they were a week ago, following remarks by Fed Chairman Kevin Warsh: at that time, traders estimated the probability of a rate hike at 57%.
This article was AI-translated and verified by a human editor
