Bitcoin Slips Below $80K as Strong US Jobs Data Fuels Fed Rate Hike Fears

Bitcoin (BTC) fell below the $80,000 threshold on Friday after a U.S. jobs report came in significantly stronger than anticipated, stoking investor fears that the Federal Reserve will maintain its restrictive monetary policy. The data triggered a broad market reaction, sending U.S. Treasury yields and the dollar higher while pressuring rate-sensitive assets.

Hawkish Fed Bets Increase

The robust employment figures immediately shifted expectations for future central bank action. According to data compiled by Woofun AI and cited by Investing.com, the market-implied probability of a 25-basis-point interest rate hike by the Fed in September jumped from 52% to 59% following the release.

Adding to concerns about persistent inflation, the report showed that average hourly earnings rose 0.3% for the month and 3.1% year-over-year. This wage growth component suggests underlying inflationary pressures remain a key variable for policymakers and the market.

Cross-Asset Market Reaction

The prospect of higher-for-longer interest rates rippled across financial markets, hitting non-yielding and risk-on assets particularly hard.

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• Bonds and Currencies: The 2-year U.S. Treasury yield, which is highly sensitive to Fed policy expectations, surged by 7.6 basis points. The U.S. Dollar Index (DXY) climbed 0.3% to 99.3, reflecting the increased appeal of dollar-denominated assets.
• Commodities and Crypto: The stronger dollar and higher yields weighed on precious metals, with gold prices falling between 1.7% and 2.2%. Bitcoin's drop below $80,000 signaled increased risk aversion in the digital asset space.
• Equities: U.S. stock futures showed a mixed response as of 8:33 AM ET. S&P 500 futures were down 0.22%, while Nasdaq 100 futures edged up a slight 0.07%.

Oil Market Charts a Different Course

In a notable divergence, the crude oil market largely shrugged off the macroeconomic data. Brent crude experienced only a minor pullback around the $95 per barrel mark and was on track to close the week with a gain of over 8%.

Analysts attribute oil's resilience to separate, overriding factors, including geopolitical tensions involving the U.S. and Iran and persistent global supply concerns. These dynamics are currently serving as the primary anchor for oil prices, insulating them from the immediate reaction to U.S. monetary policy expectations.