Bitcoin falls below $80,000 mark: Here we decode why
What's the story
Bitcoin's recent surge above the $80,000 mark has been cut short by stronger-than-expected US jobs data. The cryptocurrency fell as much as 3.5% to a low of $78,649. This decline was mirrored by stocks and bonds after non-farm payrolls rose by 162,000 in August, surpassing all estimates in a Bloomberg survey, and the unemployment rate remained at 4.1%.
Market impact
New macro challenge for Bitcoin
The recent market shift poses a new macro challenge for Bitcoin, which had just reclaimed the $80,000 level on Thursday.
This was after falling yields and a weaker dollar had supported risk assets.
The change in market sentiment came after Federal Reserve Governor Christopher Waller hinted at his support for keeping rates steady if inflation continues to cool down.
Expert opinion
Strong jobs report validates September rate hike
Fabian Dori, Chief Investment Officer at Sygnum Bank, weighed in on the market shift.
He said, "A clear rebound doesn't settle the debate; it arms the hawks."
He further added that a strong jobs report validates current probabilities for a September rate hike by the Federal Reserve.
However, he also emphasized that factors like Treasury cash balances and private credit creation are important regardless of short-term Fed decisions.
Market reaction
Shares of crypto-related companies decline
The impact of the market shift wasn't limited to Bitcoin alone. Shares of crypto-related companies also took a hit.
Cryptocurrency exchange Coinbase Global saw a decline of nearly 4%.
Meanwhile, Bitcoin accumulator Strategy Inc. and stablecoin issuer Circle Internet Group, both witnessed a dip of about 2% in their respective shares.