Bitcoin fell below $80,000 for the first time in months as robust US employment figures intensified expectations of a Federal Reserve rate hike, with markets now pricing in a 60% probability of a September 16 increase.
The US added 162,000 jobs in August, while the unemployment rate held steady at 4.1%, reinforcing investor caution ahead of the Fed’s policy decision. This has shifted capital towards safer assets, including government bonds, which have seen increased demand amid heightened risk aversion.
Bitcoin peaked at $82,400 on September 3 but has since retreated, trading between $77,200 and $82,100. Despite the decline, the cryptocurrency remains 42% above its July low, with over 71% of its supply currently in profit—a figure close to the historical average of 74.7%.
US spot Bitcoin exchange-traded funds (ETFs) recorded $1 billion in net inflows last week, indicating sustained institutional interest. However, uncertainty remains regarding the impact of an upcoming inflation report and whether ETF demand can persist in a high-interest-rate environment.
Analysts suggest the Fed’s policy path will hinge on incoming data, with hotter-than-expected inflation potentially altering the trajectory of rate decisions. The interplay between macroeconomic indicators and cryptocurrency valuations continues to shape market dynamics.
Written by Kate Harper
Economics Desk
