Bitcoin drops below $80,000 as U.S. jobs data strengthens Fed rate-hike outlook
Strong jobs report sends Bitcoin tumbling
Bitcoin fell below $80,000 after the U.S. government reported that the economy added 162,000 jobs in August, far more than economists expected. The news raised the likelihood that the Federal Reserve will increase interest rates at its meeting in September.
Key numbers from the August jobs report
- The U.S. added 162,000 jobs in August, beating the consensus forecast of 56,000.
- July's job growth was revised to 21,000, up from an earlier report of a 23,000 decline.
- The unemployment rate held steady at 4.1%.
- Bitcoin dropped about 2%, sliding below $80,000.
- U.S. 10-year Treasury yields rose 3.3 basis points to 4.80%, and 2-year yields rose 7 basis points to 4.40%.
Fed rate-hike debate intensifies
Strong jobs data gives more weight to "hawks," or Federal Reserve officials who favor raising interest rates to keep inflation in check. Just one week ago, Fed Chairman Kevin Warsh signaled a September rate hike was possible with a tough speech at Jackson Hole.
However, the outcome is not yet certain. This week, Fed Governor Chris Waller, along with New York Fed President John Williams, suggested that a rate hike was far from guaranteed. The next key data point will be the August inflation report, called CPI, due out next Friday.
What is confirmed
The August jobs report was significantly stronger than expected. Bitcoin's price reaction was immediate, with the asset slipping below the $80,000 level as bond yields rose.
Why this matters for crypto investors
Higher interest rates tend to make traditional savings and bonds more attractive compared to risky assets like Bitcoin. When the Fed signals it may raise rates, investors often move money out of crypto and into safer investments, which can push prices down.
