Bitcoin
and other cryptocurrencies fell on Friday, following stocks lower amid rising expectations of interest-rate hikes from the Federal Reserve. A cool U.S. jobs report did little to change the narrative.
The price of Bitcoin has dropped 1% over the past 24 hours to $30,250, paring losses slightly from $30,100 but still 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.
Like the
Dow Jones Industrial Average
and
S&P 500,
Bitcoin was poised 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 with higher interest rates. 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.
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.
“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,” Hasegawa said, ahead of the release of the jobs report.
Indeed, that seems to be the case. The U.S. economy added 209,000 jobs in June, surpassing some forecasts but well short of the gain of 306,000 jobs in May. But the signs of slowing did little to assuage the recent rate-hike fears, with stocks opening lower and markets still pricing in the near-certainty of a July increase in rates. Bitcoin remains rangebound.
Beyond Bitcoin,
Ether
—the second-largest crypto—sank 2% to $1,870. Smaller tokens, or altcoins, also were weaker, with
Cardano
and
Polygon
sliding 1%. It was more of the same in memecoins, with
Dogecoin
down 1% and
Shiba Inu
shedding 2%.
Write to Jack Denton at [email protected]
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