Bitcoin
and other cryptocurrencies fell Friday, following stocks lower amid rising expectations of interest-rate hikes from the Federal Reserve. That narrative likely will be advanced one way or another after the release Friday of the U.S. jobs report.
The price of Bitcoin has dropped 4% over the past 24 hours to below $30,100, with the largest digital asset vulnerable to a slide below the psychologically important $30,000 level. Bitcoin rallied past that key mark last month after applications by
BlackRock
(ticker: BLK) and others for spot Bitcoin exchange-traded funds, raising hopes of new retail and institutional interest in crypto. While the applications injected new bullish sentiment into cryptos, macroeconomic forces are creeping in as other catalysts.
“The news flow relating to spot bitcoin ETF filings seems to be losing its effect on the price, while solid U.S. economic data have pushed up Treasury yields, pressuring Bitcoin’s price,” said Yuya Hasegawa, an analyst at crypto exchange Bitbank. “Even if the jobs report indicates some cooling in the U.S. labor market, Bitcoin will still likely struggle breaking out of the current range.”
Like the
Dow Jones Industrial Average
and
S&P 500,
Bitcoin is likely to move Friday on the back of the U.S. jobs report—a key indicator for how hot the economy is running. The jobs data will be monitored closely by the Fed as it fights against decades-high inflation.
Resilient jobs data this week, particularly the ADP employment report on Thursday, have reignited fears that the central bank will continue to ramp up rates even after pausing in June, with markets bracing for a hike this month and possibly another in September. The ADP data sent stocks spiraling lower on Thursday and Bitcoin followed.
“The macro red-letter days are coming thick and fast for Bitcoin with the U.S. jobs report following uber-strong private payrolls data on Thursday and Wednesday’s hawkish Fed minutes—both of which left the door wide open for another rate hike this month, and possibly more in the offing,” said Sam Yilmaz, co-founder of crypto-focused venture capital group Bloccelerate.
Rising rates were a huge headwind for cryptos last year, while optimism in 2023 that the worst was over helped Bitcoin to its best first half to a year since 2019. The jobs report, due at 8:30 a.m. Eastern time, will be among the last major economic data releases before the Fed’s next decision on rates in late July.
Beyond Bitcoin,
Ether
—the second-largest crypto—sank 5% to $1,850. Smaller tokens, or altcoins, also were weak, with
Cardano
dropping 4% and
Polygon
sliding 5%. It was more of the same in memecoins, with
Dogecoin
down 5% and
Shiba Inu
down 6%.
Write to Jack Denton at [email protected]
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