Bitcoin Slides as Blowout Jobs Report Revives Fed Hike Odds

The U.S. economy added 162,000 jobs in August, surpassing economists' expectations by nearly triple. The unemployment rate remained steady at 4.1%, and both June and July payrolls were revised upward. The surge in jobs data fueled speculation of a Federal Reserve interest rate hike at the central bank's upcoming September meeting.

Dow Jones Industrial Average slipped by 0.4%, while the S&P 500 and Nasdaq Composite experienced minor declines. Fed funds futures traders now estimate a 58% probability of a rate hike during the Sept. 15-16 meeting, up from 49.4%. The stronger jobs number raised Treasury yields and pressured Bitcoin, which fell over 2% to around $79,300.

This price drop followed a brief surge to a four-month high of $82,240 earlier in the day. Higher interest rates make risk-free assets more appealing, pushing investors toward U.S. treasuries and away from riskier assets like stocks and crypto. The relatively strong jobs report also strengthened the dollar, negatively impacting dollar-priced assets.

Despite a recent short squeeze that wiped out over $415 million in bearish bets, Bitcoin opened September near $77,500, continuing a trend of losses in September for the cryptocurrency.