Crypto Markets Slide as Weak Jobs Data, Geopolitical Tensions and Recession Fears Trigger Risk-Off Shift
Cryptocurrency prices declined sharply on Friday, as a combination of disappointing U.S. employment data, mounting geopolitical risks, and rising recession fears drove investors out of risk assets and into defensive positions.
Bitcoin (BTC) fell 1.4% over the past 24 hours to $113,648, while ether (ETH) dropped 3.7% to $3,503. Other major tokens followed suit: XRP declined 1.5% to $2.94, solana (SOL) lost 2.7% to $164.13, and dogecoin (DOGE) fell 3.7% to $0.1993, according to CoinDesk data.
The sell-off extended beyond crypto, with U.S. equities also finishing lower. The Dow Jones Industrial Average fell 1.23%, the S&P 500 dropped 1.6%, and the Nasdaq Composite tumbled 2.24% as traders responded to a deteriorating economic outlook and growing political uncertainty.
July Jobs Report Disappoints
The U.S. economy added just 73,000 jobs in July, well short of expectations. Adding to the negative surprise, the Bureau of Labor Statistics revised May and June’s employment figures downward by a combined 258,000 jobs — significantly reducing the reported strength of the labor market in Q2.
While the unemployment rate remained unchanged at 4.2%, long-term unemployment increased by 179,000, reaching 1.8 million. Labor force participation was flat at 62.2%, while the number of new job seekers rose by 275,000, suggesting more Americans are looking for work but struggling to find employment. The employment-to-population ratio slipped modestly compared to a year ago.
Job growth was largely concentrated in healthcare and social assistance, with other key sectors — including manufacturing, construction, financial services, and technology — showing little to no momentum.
The report was interpreted by markets as an early warning sign that labor market weakness may be accelerating, deepening concerns about a possible U.S. economic downturn.
Trump Targets BLS Commissioner Over Jobs Data
In a sharp political turn, President Donald Trump accused Bureau of Labor Statistics Commissioner Erika McEntarfer of manipulating economic data during the 2024 election season. In a post on Truth Social, he cited prior overstatements of job growth and announced that he had ordered McEntarfer’s immediate dismissal.
The accusation and attempt to remove a federal official overseeing key economic indicators unsettled investors, raising fears about the politicization of core government institutions. The move added to Friday’s volatility, especially in sectors sensitive to perceptions of data integrity — including financials and crypto.
Submarine Deployment Raises Tensions with Russia
Later in the day, Trump posted another message disclosing that he had directed two U.S. nuclear submarines to reposition in response to statements made by former Russian president Dmitry Medvedev. The announcement, made without confirmation from the Department of Defense, stirred concerns about escalating tensions with Moscow.
While some analysts saw the move as political messaging aimed at encouraging diplomatic de-escalation, the public nature of the directive — combined with its timing — introduced fresh uncertainty into already fragile global markets.
Markets Price in Fed Rate Cuts, but Confidence Remains Fragile
Following the weak jobs report, market participants sharply increased expectations for a Federal Reserve rate cut at its September policy meeting. Some are now pricing in a 50-basis-point move. However, the prospect of easier monetary policy did little to boost sentiment.
Instead, rate cuts are increasingly being viewed as reactive — a response to growing signs of economic deterioration rather than a proactive measure to stimulate growth. For risk assets like crypto, that shift in narrative has weighed heavily.
Despite the potential for lower real yields, investors remained cautious. The broader macro picture — marked by slowing growth, political uncertainty, and global tension — continued to pressure digital assets and other high-beta markets heading into August.
