BTC’s progress to over $81,000 came to a halt after the release of the jobs report.
The US economy added almost three times as many jobs as expected in August, triggering an immediate sell-off for risk-on assets like bitcoin as investors reassess the chances of another Federal Reserve rate hike.
The cryptocurrency’s price had risen to over $81,000 before the news went live, but plunged immediately by $2,000 to $79,200.
More specifically, the US economy added 162,000 jobs in August, according to data shared by the Bureau of Labor Statistics. The general expectations were for roughly 55,000-58,000 new jobs, which means that the actual numbers were significantly higher. The unemployment rate remained unchanged at 4.1%.
The July reading was also revised sharply higher, from a previously reported loss of 23,000 jobs to a gain of 21,000. Average hourly earnings increased 0.3% monthly and 3.1% annually.
A strong labor market gives the Federal Reserve more room to keep monetary policy tight, which, given Kevin Warsh’s hawkish speech from last week, spells trouble for risk-on assets like bitcoin.
The blowout jobs number weakens one argument for keeping rates unchanged: that the US labor market needs protection from tighter monetary policy. Higher interest-rate expectations typically push Treasury yields and the greenback north while reducing the relative appeal of risk assets.
Although the jobs report does not guarantee a September rate hike, as inflation remains the biggest concern for the US central bank, it certainly gives investors a lot to think about ahead of the CPI data next week.
