Bitcoin came under pressure after the latest U.S. jobs report showed the labor market was stronger than expected. Employers added 162,000 jobs in August, well above the roughly 65,000 economists had projected, while unemployment remained at 4.1%.
The stronger data pushed Bitcoin lower from above $81,000, with the cryptocurrency moving between the upper $78,000s and lower $80,000s as traders reassessed the Federal Reserve’s interest-rate outlook.
The latest move raises an important question for Bitcoin: can institutional buying keep the rally intact despite growing expectations for tighter monetary policy, or will uncertainty surrounding the Fed’s September 15–16 meeting weigh on prices?
August’s employment gains were far above the average monthly increase of about 31,000 jobs recorded during the previous 12 months. The figures also represented a significant rebound from the softer hiring trend seen earlier in the summer.
A stronger labor market could give the Federal Reserve less reason to cut rates in the near term. Instead, policymakers may have greater flexibility to keep borrowing costs elevated or consider tighter policy.
Markets quickly reflected that possibility, with traders increasing bets on a rate hike rather than a reduction. Bitcoin’s retreat came as those expectations shifted.
However, the change in rate probabilities does not represent a final Fed decision. It simply shows how investors are interpreting the latest economic data, and those expectations can influence Bitcoin and other risk assets well ahead of the actual policy announcement.
Donald Trump has continued to push for lower interest rates. In a Truth Social post, he argued that the U.S. had become a stronger credit and should therefore benefit from cheaper borrowing costs. He also criticized the Federal Reserve Board and urged officials to act in what he characterized as the country’s best interests.
The employment figures point in the opposite direction. Strong hiring typically reduces the immediate need for monetary easing, which explains why traders shifted toward higher rate expectations following the report.
Bitcoin has already shown how sensitive it can be to changes in Fed expectations. Kevin Warsh’s hawkish comments at Jackson Hole previously helped push Bitcoin toward $77,000, while the probability of a rate hike rose to 57%.
The market mood changed on September 3 after Fed Governor Christopher Waller delivered more neutral remarks. Bitcoin gained 5% following his comments, while spot Bitcoin ETFs attracted approximately $730.8 million in net inflows.
Rate-hike expectations later moved back toward 50%, leaving investors almost evenly split between a potential increase and a policy hold.
The resilience of ETF flows is particularly significant. Institutional investors continued putting money into Bitcoin products even as expectations for Fed policy changed. The August jobs data has strengthened the hawkish case, but it has not eliminated the recent improvement in institutional demand.
September Fed Meeting Becomes Bitcoin’s Next Test
The September 15–16 Federal Reserve meeting is now the next major event for Bitcoin and other risk-sensitive assets. Traders will likely continue adjusting their positions as additional economic indicators arrive before the decision.
If the labor market remains strong and rate-hike expectations stay elevated, restrictive monetary policy could continue to limit Bitcoin’s upside.
A surprise rate cut could instead provide another boost to Bitcoin, particularly if ETF inflows remain strong. But the reason for the cut would be crucial.
A rate reduction caused by a weakening economy could produce a very different reaction from a cut delivered against a stable economic backdrop. If investors view easing as evidence of serious economic deterioration, Bitcoin and other risk assets could initially decline despite lower rates.
For now, markets remain close to a 50-50 split between a September rate hike and a hold. The stronger August jobs report has tilted expectations toward the hawkish side, but it has not yet settled the Fed’s next move.
