Bitcoin (BTC) reclaimed $64,000 on Thursday, August 2, following the release of new U.S. job data. The unemployment and nonfarm payrolls data signals a potentially dovish shift in the Federal Reserve’s monetary policy. This increases the odds of a September fed rate cut as teased earlier by Fed Chair Jerome Powell.
U.S. Job Data Overview
The U.S. unemployment rate for July came in at 4.3%, surpassing the expected 4.1%. Moreover, it significantly rose from the previous month’s 4.1%. Furthermore, this represents the highest unemployment rate since October 2021.
Additionally, the seasonally adjusted nonfarm payrolls increased by only 114,000, marking the smallest gain since April 2024. These figures suggest a slowdown in job growth and a potential cooling of the labor market.
Earlier, on Wednesday, August 1, initial jobless claims increased by 14,000 to 249,000 for the week ending July 27. Meanwhile, continuing claims surged by 33,000 to 1,877,000 for the week ending July 20. These rising figures indicate a growing number of unemployed individuals, suggesting potential vulnerabilities in the labor market.
Moreover, the cooling U.S. job data could influence the Fed’s decision-making process, potentially boosting the case for a rate cut. A weaker labor market might prompt the Fed to adopt a more accommodative stance to stimulate economic activity. Thus, it affects investor sentiment across various asset classes, including cryptocurrencies.
A Fed rate cut boosts investments in the cryptocurrency industry. Reduced interest rates lower the appeal of traditional savings accounts and fixed-income investments. This prompts investors to seek higher returns in alternative assets like cryptocurrencies.
Additionally, cheaper borrowing costs can spur more venture capital and institutional investments in the crypto sector, as companies and startups are more inclined to expand and innovate. Also, lower Federal Reserve interest rates can also lead to higher asset prices, making cryptocurrencies a more attractive option for those looking to diversify their portfolios.
Also Read: European Central Bank Braces For Two More Rate Cuts, Is US Fed Next?
Bitcoin Hits $64,000 Amid September Cut Speculations
In the latest meeting, Federal Open Market Committee (FOMC) decided to keep the key interest rate steady at 5.25% to 5.5%. This decision aligns with the Fed’s ongoing efforts to control inflation while balancing economic growth. However, U.S. Fed Chair Jerome Powell indicated that a rate cut in September could be on the table, especially if inflation remains favorable and labor market conditions continue to weaken.
Powell underscored the Fed’s commitment to impartiality. He stated, “We never use our tools to support or oppose a political party, a politician, or any political outcome.” At press time, as U.S. unemployment data came in higher than expected, the BTC price gained 0.18% to $64,805.10 in the 24-hour frame on Thursday.
However, Bitcoin marked a much greater rebound as it has earlier fallen to the $62,000 level during the day. Nonetheless, the favourable U.S. job data propelled BTC close to $65,000, which is a significant milestone amid market uncertainty.
Also Read: Altcoin Whales Prepare for Rally After September Fed Rate Cut
Kritika Mehta
Kritika boasts over 2 years of experience in the financial news sector. Currently working as a crypto journalist at Coingape, she has consistently shown a knack for blockchain technology and cryptocurrencies. Kritika combines insightful analysis with a deep understanding of market trends. With a keen interest in technical analysis, she brings a nuanced perspective to her reporting, exploring the intersection of finance, technology, and emerging trends in the crypto space.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
