Bitcoin’s price has surged past $62,000. The recent US job market report catalyzed the upswing. It showed a looser labor market, which might be good news for the Federal Reserve.
The price rebound BTC experienced comes after a corrective period fueled by market and regulatory uncertainties.
Bitcoin Shows Signs of Recovery After US Labor Data
The US Bureau of Labor Statistics revealed a slight increase in the unemployment rate to 3.9%. This contradicts expectations that unemployment would stabilize at 3.8%.
The uptick in unemployment has not deterred the resilient growth in non-farm payrolls. It added 175,000 jobs last month, albeit lower than the anticipated 243,000.
“Among the major worker groups, the unemployment rate for adult men (3.6 percent) increased in April. The rate for Blacks (5.6 percent) decreased, offsetting an increase in the prior month. The jobless rates for adult women (3.5 percent), teenagers (11.7 percent), Whites (3.5 percent), Asians (2.8 percent), and Hispanics (4.8 percent) showed little change over the month,” the report read.
Despite these mixed signals, the market’s response was unexpectedly positive. Bitcoin swiftly ascended above the critical $60,000 threshold to reach an intraday high of $62,150 at the time of writing.
Elián Huesca, co-founder at Pyminers & Ordfluencer, attributes Bitcoin’s bullish response to several factors. Primarily, the cryptocurrency is often seen as a hedge against market instability and inflation. As the US dollar index (DXY) softened to around 104.6, Bitcoin gained momentum, underlining its role as a counterbalance to traditional fiat currencies.
“It is interesting to see Bitcoin’s response towards the employment figures as it is reacting positively in front of economic uncertainty. As traditional markets show signs of slowing down, some could use Bitcoin to hedge against potential losses elsewhere. Bitcoin is both an percived as a speculative and potential store of value asset, these two combined with a wide enough investor base allows for a variety of motivations behind inflows towards BTC,” Huesca told BeInCrypto.
Read more: Bitcoin Price Prediction 2024/2025/2030
The mixed job data also seems to bolster the notion of a “soft landing” for the US economy, easing concerns over a potential sharp downturn in the labor market. This perspective is reinforced by adjustments to federal funds, which now foresee two rate cuts 2024, doubling the expectation.
“Rate cuts generally lead to lower yields on government securities and weaken the domestic currency, making alternative non-yield-bearing assets like Bitcoin more attractive to investors. Lower interest rates can also result in more liquidity in the market, some of which might find its way into Bitcoin and other cryptocurrencies as investors seek higher returns than what is available through traditional savings or bonds,” Huesca concluded.
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