Bitcoin Hovers at $93,000 as Jobs Report Intensifies Inflation Concerns

The U.S. economy added more jobs than economists expected in December, which could deepen inflation concerns already rattling Bitcoin’s price in recent days.

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U.S. employers added 256,000 jobs in December, the Bureau of Labor Statistics (BLS) reported Friday. Economists expected the figure, which measures job creation, to show that 160,000 jobs were added last month, according to Trading Economics.

The Bitcoin price fell following Friday’s print, diving 2.2% to $92,700 from $94,900 in around 10 minutes. Over the past week, Bitcoin’s price has been volatile, trading as high as $102,300 and as low as $91,000, as macroeconomic signals painted a picture of a strong economy.

The BLS said Friday that the unemployment rate ticked down in December to 4.1%, a slight decrease compared to 4.2% in November. Typically, drops in unemployment can contribute to inflation through increased wage growth.

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“Good news is bad news,” Tom Dunleavy, a partner at MV Capital, told Decrypt. “Strength in employment means further inflation pressures, and therefore a lower likelihood of rate cuts.”

The Federal Reserve signaled last month that it would cut interest rates at a slower pace this year, cautious of how shifts in immigration and trade policy could impact rising consumer prices, according to minutes released from the Fed’s December meeting earlier this week.

Friday’s labor market gauge follows readings on economic activity—specifically in the services sector and job openings—that sparked inflation jitters among investors early this week. 

Meanwhile, higher bond yields have put pressure on risk assets like stocks and crypto. That’s because higher bond yields lead to lower Bitcoin and stock allocations in investor portfolios.

The 10-year treasury yield rose to 4.78% Thursday, hitting its highest level since October 2023, according to TradingView. FalconX Head of Research David told Decrypt that climbing yields have reflected “a more complex inflation story than many anticipated.”

“Adding to market uncertainty is the clouded picture of how economic policy might shift under the administration,” he said, referencing the President-elect’s potential tariff policy.

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Traders grew less confident Friday that the Fed would cut rates in the coming months, favoring June, per CME FedWatch. A month ago, traders foresaw a 20% chance that the Fed would ease financial conditions at its January meeting, but those chances had shrunk to 2.7% Friday.

While Friday’s labor report initially thrust Bitcoin’s price lower, the cryptocurrency traded up 1.5% over the past day at around $93,900, as of this writing. Meanwhile, the price of Ethereum and Solana was little changed, at $3,200 and $186, respectively.

As inflation concerns have come into focus, Bitcoin’s correlation with the S&P 500 and Nasdaq has increased, Lawant said, marking “a notable pivot in market dynamics.”

“Investors turned their attention away from traditional macro factors like monetary policy and toward industry-specific concerns, with electoral outcomes emerging as the dominant price driver,” he said.

Edited by Stacy Elliott.