Fresh U.S. jobs data is good news for economy but bad news for crypto market
Bitcoin fell lower on Friday, touching an intraday low of $21,164 on the Bitstamp exchange due to strong U.S. jobs data.
The U.S. economy added a whopping 372,000 jobs in June, significantly outperforming analysts’ forecast of 250,000, according to data published by the Bureau of Labor Statistics earlier today.
The exceptionally strong labor market suggests that U.S. recession fears were vastly overblown.
While this is good news for the U.S. economy, risk assets, including cryptocurrencies, dipped significantly lower since the buoyant jobs data will likely embolden the U.S. Federal Reserve to hike rates at a much faster pace.
Fed-dated swaps are now pricing with a 97% chance of yet another 75 basis point hike in July.
The world’s most powerful central bank is attempting to perform a “soft landing,” which means bringing down inflation with higher interest rates without causing a severe downturn.
As reported by U.Today, the Fed announced the first 75 basis point rate hike since 1994 in mid-June.
Earlier this week, Fed Governor Christopher Waller said that he would endorse another 50 basis point hike in September.
The Fed’s hawkish monetary policy is believed to be the main reason behind Bitcoin’s atrocious price performance in 2022. The largest cryptocurrency recently recorded its worst quarter in more than a decade. This is in sharp contrast to the 2021 bull market, during which the top cryptocurrency kept marking new record highs because of the Fed’s ultra-easy monetary policy.
As reported by U.Today, Galaxy Digital CEO Mike Novogratz recently said that Bitcoin could go lower before eventually recovering as soon as the Fed “flinches.”