Crypto Gains Evaporate as Weak Jobs Data Spurs Volatility
A softer-than-expected U.S. jobs report on Friday initially lifted crypto markets but the rally proved fleeting, with heavy selling quickly reversing momentum across digital assets and equities.
The Bureau of Labor Statistics reported just 22,000 jobs added in August, well below forecasts. The figure bolstered expectations that the Federal Reserve will cut rates at its September meeting, possibly by as much as 50 basis points. Risk assets jumped immediately after the release, with bitcoin, ether, stocks, and gold all pushing higher.
The optimism, however, unraveled once Wall Street trading opened. Ether (ETH) led losses, tumbling nearly 4% within minutes and closing the day 1.5% lower at $4,279. Solana (SOL) dropped to $202.76 and XRP slipped to $2.81, while bitcoin (BTC) declined around 2.5% but still held modest gains over 24 hours near $110,500.
Equities mirrored the reversal, with the Nasdaq down 0.6% and the S&P 500 off 0.7% by the close. Gold managed to retain safe-haven flows, rising 0.9% after touching a record $3,654 per ounce earlier in the session.
Economists argued the jobs data leaves the Fed little choice but to act. “There’s barely been any job growth in the past four months,” said Heather Long, chief economist at Navy Federal. CME futures now price an 86% chance of a 25 bp cut in September and 14% odds of a 50 bp move.
Crypto-linked equities also extended their slide. Coinbase dropped 4%, Circle 7.5%, MicroStrategy 1.5%, and Marathon Holdings 3.2%. Ether treasury plays Bitmine Immersion and Sharplink Gaming sank 5.4% and 6%, respectively.
“The warning bell that rang in the labor market a month ago just got louder,” said Olu Sonola, Head of U.S. Economic Research at Fitch Ratings, noting four consecutive months of manufacturing job losses. “A weaker-than-expected jobs report all but seals a 25-basis-point rate cut later this month.”
