Bitcoin prices rose on Friday, rising more than 3% to reach a daily high above $62,300.
Bureau of Labor Statistics reported It said Friday that employers added 254,000 jobs in September, well above economists' expectations of 140,000 jobs. Meanwhile, employment data for July and August improved, painting a brief picture of weakened job conditions as the Federal Reserve began its easing campaign.
Friday's data for September showed that US employers added the most jobs in a single month, after adding 310,000 in March. At the same time, the unemployment rate fell from 4.2% to 4.1%, which was below economists' expectations for June's unemployment number.
While the price of Bitcoin is currently down slightly to $62,000, the price trend remains positive over the final day as Bitcoin starts to pull back after a rough dip to start October.
said Lina Eldib, research analyst at 21Shares. Decrypt A reading of Friday's work is in favor of “risk assets” such as stocks and crypto, he said. She suggested that lowering borrowing costs as the Federal Reserve continued its easing campaign would be beneficial to Bitcoin's value.
“Bitcoin and the longer tail of crypto assets are sensitive to labor market data because it will influence the Fed's decision to cut rates, which will have a positive effect on Bitcoin as borrowing costs decrease,” she said. “Therefore, we expect flows to begin to recover following the escalation of geopolitical tensions that rocked the market last week.”
Indeed, Bitcoin is down 6% on the week as markets rumble after missiles are fired from Iran into Israel.
The spectacle, known as Uptober – a period of historic strength for Bitcoin's price – has been put on hold, with BlackRock's spot Bitcoin ETF falling for just the fourth time on record as bitcoin fell below $60,000 on Thursday, according to Bloomberg ETF analyst James Seifert. And collectively, the Bitcoin ETF marked three straight outflow days to start the month.
As inflation moves toward the Fed's 2% target, policymakers have increasingly focused on labor market conditions. The concern is that the recent two-decade high interest rate cuts may be too limited in the foreseeable future, sending the economy into recession.
Fed Chairman Jerome Powell earlier this week poured cold water on the prospect of a jumbo rate cut. After the Fed cut its benchmark rate by 50 basis points last month, the US central bank said the “fundamental issue” was two more cuts of 25 basis points by the end of the year.
In the face of a strong labor reading, expectations of a 50 basis point cut were largely erased, according to CME Group's FedWatch tool. Down from a 32% chance a day earlier, traders penciled in a 5% chance the Fed would call for such extreme action.
Friday's labor market gauge was too strong to stoke short-term inflation fears, said Zach Pandle, research manager at Grayscale Investments. Decrypt In the statement. But he said a backdrop of strong economic growth could support bitcoin's price, especially as talk of government spending escalates after the November presidential election.
“The debate about federal rate cuts and large government deficits continues alongside strong economic growth, which should be positive for investors' risk appetite,” he said. “Grayscale Research Bitcoin Expects Gains in This Risk-Positive Environment.”
Edited by Andrew Hayward.
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