Bitcoin Falls 2% as Jobs Report Lifts Fed Rate-Hike Odds to 58%
In brief
- U.S. economy added 162,000 jobs in August, nearly triple the 53,000 forecast
- Bitcoin fell 2% to $79,300 minutes after payrolls release
- Fed rate-hike odds for September jumped to 58% from 49.4%
- Dow fell 226 points; Treasury yields spiked to January 2025 highs
Equities and Treasuries React
The Dow Jones Industrial Average fell 226 points, or 0.4%, while the S&P 500 slid 0.2% and the Nasdaq Composite ticked up 0.1% following the payrolls release. Treasury yields rose across the curve, with the two-year note touching its highest level since January 2025. The unemployment rate held steady at 4.1%, matching expectations.
Gold fell to a session low of $4,380 an ounce, on pace for a second straight weekly loss. The selloff reflected a familiar dynamic: higher interest rates make risk-free assets more attractive and raise the bar for what stocks and crypto need to return to justify holding them over U.S. treasuries.
Why Rate Hikes Weigh on Bitcoin
Higher rates make risk-free assets more attractive, so a hike raises the bar for what stocks and crypto need to return to justify holding them over treasuries. The moves also tend to strengthen the dollar, which weighs on dollar-priced assets like Bitcoin the same way it weighs on gold.
Bitcoin's decline came after it had climbed as high as $82,240 earlier Friday, a four-month high, following dovish signals from Fed Governor Christopher Waller. Waller signaled Thursday he'd be "inclined to support" holding rates steady, a comment that had lifted sentiment before the jobs surprise reversed the move.
Bitcoin opened September near $77,500. Traders have nicknamed the month "Red September"—the token has closed lower in eight of the last 13 Septembers.
Market Breadth and Sentiment
Despite the intraday pullback, spot Bitcoin ETFs logged $730.8 million in net inflows, signaling some institutional demand. Total crypto market capitalization held near $2.67 trillion, up 0.11% on the day. CoinMarketCap's Fear and Greed Index read 75, still within "greed" territory, and the Altcoin Season Index sat at 38, still favoring Bitcoin over the broader field.
Thursday's short squeeze wiped out more than $415 million in bearish bets—a reminder of the volatility baked into the market as traders position for the Fed's next move. President Donald Trump endorsed the jobs data, writing on Truth Social: > "Great jobs number just announced, breaking all estimates"
Trump also renewed his demand that the Fed cut rates and threatened to halt trade with countries running a surplus against the U.S. if it does not. The conflicting signals—a strong labor market justifying rate hikes, but political pressure to cut—leave Bitcoin caught between competing forces heading into mid-September's rate decision.
