Bitcoin Magazine
Bitcoin Dips Below $80,000 on Strong US Jobs Report
Following an unexpectedly strong labor report showing acceleration in the U.S. job market, bitcoin experienced a decline on Friday.
Earlier during the New York morning, the top cryptocurrency fell as low as $78,706 before recently trading near $79,764. Over a 24-hour window, it is currently down more than 1%. Just a day prior, on Thursday, the asset surged past $82,000.
Because increased employment boosts consumer spending—which in turn can drive inflation upward—a robust labor market generally increases the likelihood that the Federal Reserve will raise interest rates.
During his first major address as head of the U.S. central bank last week, Federal Reserve Chair Kevin Warsh stated that he still had “more work to do” in combating inflation. Historically, bitcoin performs well when interest rates are low.
At present, traders estimate a 50% to 60% probability of a U.S. Federal Reserve interest rate hike during the upcoming policy meeting scheduled for September 15–16.
Meanwhile, U.S. President Donald Trump issued a demand on Friday for the Federal Reserve to cut interest rates.
Via his social media platform Truth Social, Trump posted: “Lower the interest rates because the U.S.A. is a much stronger credit than it was just a short time ago!”
Furthermore, he stated: “We should have the LOWEST RATE of any country in the World, like ‘the old days.'”
Amid renewed investor anxieties regarding dollar debasement, bitcoin has recently decoupled from traditional equities.
Last month, the cryptocurrency began climbing after the U.S. Treasury Department announced plans to more than double government debt repurchases. This resulted in the coin’s strongest performance in three years and its third-best August on record.
Analysts note that the widely discussed debasement trade has re-entered the spotlight, with bitcoin trading tightly alongside gold. This strategy involves investors purchasing specific assets to hedge against a decline in currency value.
Additionally, reports surfaced last month indicating that U.S. public debt surpassed $40 trillion for the first time. Such high levels of debt weaken trust in the dollar, thereby boosting the appeal of assets like gold and bitcoin.
Frequently Asked Questions
Why did bitcoin drop below $80,000?
Bitcoin fell following a stronger-than-expected U.S. jobs report for August, which raised concerns about potential Federal Reserve interest rate hikes.
What is the current probability of a Fed rate hike?
Traders currently estimate a 50% to 60% chance of an interest rate hike at the upcoming September 15–16 policy meeting.
What did Donald Trump say about interest rates?
President Donald Trump demanded that the Federal Reserve slash interest rates, writing on Truth Social that the U.S. should have the lowest rate of any country in the world.
Why is the debasement trade popular right now?
Renewed investor concerns over dollar debasement—fueled by U.S. public debt exceeding $40 trillion—have led investors to buy assets like bitcoin and gold to hedge against currency depreciation.
