AI Tokens Lead Crypto Rebound Amid Strong U.S. Economy

Bitcoin may have bottomed at $60,000 earlier this week, and the Fed easing into a strong economy points to more upside, Will Clement said.

Altcoins Spearhead Crypto Rebound as U.S. Economy Shines Bright

Bitcoin rose above $62,000 on Friday as a stellar U.S. jobs report for September eased fears of an impending recession, boosting broader crypto markets and setting the stage for a potential smaller interest rate cut by the Federal Reserve next month.

After a week of geopolitical concerns and crypto markets seesawing on news from the Taiwan Strait and the unfolding situation in Ukraine, a key U.S. labor market report took center stage and provided optimism for the battered markets.

The U.S. unemployment rate fell to 4.1% last month, hitting a new low for the current economic cycle and lower than the 4.2% forecast by economists polled by Reuters. جالب Nonfarm payrolls also increased by 251,000, smashing past the estimate of 140,000 and following August's upwardly revised net hiring of 326,000 jobs.

The unemployment rate among young Americans also fell to 7.3% from 7.8% in August, marking the lowest youth unemployment rate since March 2020, at the onset of the COVID-19 pandemic. جالب

"Bitcoin and the longer tail of crypto assets are sensitive to labor market data because it influences the Fed’s decision on rate cuts, which in turn have a positive impact on BTC as borrowing costs fall," Leena ElDeeb, research analyst at digital asset manager 21Shares, told Blockworks in an email.

"We expect flows to start recovering following the escalation of geopolitical tensions that shook the market over the past week.”

The crypto markets responded positively to the jobs report, with bitcoin rising steadily during U.S. trading hours to reach $62,300, adding 2.2% over the past 24 hours. The world’s largest cryptocurrency started the week trading around the $60,000 price point and fell as low as $58,800 on Wednesday morning.

After a brief recovery past the $60,000 level on Wednesday evening, bitcoin price action largely consolidated throughout Thursday and into Friday morning before the jobs report.

Following the jobs report, investors now anticipate a smaller 25 basis point interest rate cut by the Fed at its next meeting in early November. The central bank has already undertaken four consecutive 75 basis point rate hikes this year in an effort to curb soaring inflation.

"This morning's labor market data will likely lead to a 25 basis point rate cut by the Fed in November, which is bullish for bitcoin and other risk assets," ElDeeb added.

"A smaller rate cut will slow down the pace of tightening and ease pressure on the U.S. economy, which will be felt throughout financial markets."

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Blockworks exclusive: FTX, SALT, and the Bahamas’ Grand Plan for Crypto

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Blockworks exclusive: FTX, SALT, and the Bahamas’ Grand Plan for Crypto

Blockworks exclusive: FTX, SALT, and the Bahamas’ Grand Plan for Crypto

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Blockworks exclusive: FTX, SALT, and the Bahamas’ Grand Plan for Crypto

Blockworks exclusive: FTX, SALT, and the Bahamas’ Grand Plan for Crypto

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