Bitcoin drops below $80,000 as hot jobs data spurs US Federal Reserve hike bets
Stronger-than-expects job data in August revived bets on an interest rate hike in September.
Bitcoin plummeted nearly 3.5% following stronger-than-anticipated US jobs data, reigniting speculation about a potential September Federal Reserve rate hike. The cryptocurrency's value plummeted to as low as $78,649, aligning with the decline in stocks and bonds. The nonfarm payrolls data showed an increase of 162,000 in August, surpassing all expectations in a Bloomberg survey, while the unemployment rate remained at 4.1%.
Two-year Treasury yields rose, and the US dollar strengthened. This shift presents a new macro challenge for Bitcoin, which had previously reached $80,000 on September 3rd. At that time, falling yields and a weaker dollar supported risk assets following Fed Governor Christopher Waller's indication of maintaining steady rates if inflation continued to ease.
Fabian Dori, chief investment officer at Sygnum Bank, noted that a clear rebound does not resolve the debate; it merely strengthens the arguments for a September hike. Dori emphasized that factors such as Treasury cash balances, bank balance-sheet capacity, private credit creation, and stablecoin supply are independent of short-term Fed decisions.
Additionally, shares of crypto-related companies experienced declines: Coinbase Global fell by about 4%, while Bitcoin accumulator Strategy and stablecoin issuer Circle Internet Group each slipped around 1%.
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