Bitcoin drops below $80,000 after August jobs report beat
Bitcoin fell below $80,000 after August nonfarm payrolls rose 162,000 versus 56,000 forecast; unemployment held at 4.1%. Treasury yields rose, pressuring risk assets as rate-hike odds moved higher.
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Crypto-linked stocks and gold miners were among the worst performers on Friday after stronger-than-expected August jobs data strengthened the case for a Federal Reserve rate hike this month. • VanEck Gold Miners ETF stock is trending lower.
What’s pulling GDX shares down? The U.S. economy added 162,000 jobs in August, well above the consensus estimate of 56,000.
July’s reported loss of 23,000 jobs was also revised into a gain of 21,000.
The stronger labor market has now fully shifted the focus toward the next inflation reading, with price pressures still remaining above the 2% target.
CME FedWatch now puts the probability of a hike to 3.75%—4% at the Sept.
16 FOMC meeting at 60.2%, versus 39.8% for a hold, as of 9:19 a.m.
ET. “The August jobs report was much better than expected, focusing the Fed squarely on controlling inflation when they meet next in September,” said Bill Adams, chief economist at Fifth Third Commercial Bank.
Gold Miners Took The Worst Of It The VanEck Gold Miners ETF (NYSE: GDX ) fell 1.90% shortly after the open, the weakest among equity industries.
Spot gold prices fell 1.4% to $4,400 per ounce.
The reaction reflects the market’s repricing of interest-rate expectations.
Higher rates can weigh on non-yielding assets such as gold and Bitcoin (CRYPTO: BTC), while also putting pressure on companies whose valuations are sensitive to borrowing costs.
The 2-year Treasury yield spiked to 4.425% within minutes of the release.
The 30-year yield sat at 5.236%.
Bitcoin fell 2.10% to about $79,461, holding below $80,000 after briefly trading above $81,200 before the release.
The biggest decliners in Pro ‘s screen of stocks with more than $10 billion in market capitalization were concentrated in two groups: gold miners and crypto-linked companies.
Company Price Change Circle Internet Group, Inc. (NYSE: CRCL ) $97.50 -3.78% BitMine Immersion Technologies, Inc. (NYSE: BMNR ) $25.19 -3.71% Franco-Nevada Corporation (NYSE: FNV ) $263.50 -3.64% Gold Fields Limited (NYSE: GFI ) $47.55 -3.59% Equinox Gold Corp. (NYSE: EQX ) $12.66 -3.51% IAMGOLD Corporation (NYSE: IAG ) $20.11 -3.46% AngloGold Ashanti plc (NYSE: AU ) $108.31 -3.30% Agnico Eagle Mines Limited (NYSE: AEM ) $201.26 -3.05% Strategy Inc. (NASDAQ: MSTR ) $137.78 -2.98% What’s Next? The market’s next major test comes from inflation.
On Thursday, Fed Gov.
Christopher Waller said he could support holding rates if inflation continues to improve.
He also said he would consider a hike if August inflation comes in hot.
That makes the August Consumer Price Index, due Sept.
11 at 8:30 a.m.
ET, particularly important.
It will be the last major inflation reading before the Federal Open Market Committee meets on Sept.
16.
A strong jobs report has increased the odds of a hike.
Now even an in-line CPI reading could turn those expectations into a much firmer conviction.
Still, higher interest rates may not be enough to derail the broader market rally, some experts say. "We will be watching to see if the stock market shakes this off and rallies into the close before the long weekend, because that will indicate the optimism around the AI build-out — and extremely strong corporate earnings — are the most important factors, and Fed rate changes are less important for investor psychology," said Chris Zaccarelli, chief investment officer for Northlight Asset Management.
Read Also: August Jobs Report Preview: What Would Make a Fed Hike a Done Deal?