Bitcoin shook off early losses in the wake of a stronger-than-forecast US employment report that has sparked expectations of higher rates and volatile price swings in mainstream markets.
(Bloomberg) — Bitcoin shook off early losses in the wake of a stronger-than-forecast US employment report that has sparked expectations of higher rates and volatile price swings in mainstream markets.
“Bitcoin remains up on the week in spite of most major risk benchmarks being lower,” said Stephane Ouellette, co-founder and CEO of FRNT Financial. “It does appear as though there was a slight reaction to the strong jobs report, which ostensibly gives the Fed more room to tighten further, in very thin trading.”
The largest digital asset by market value dropped about 1% after the September jobs report, and was 1.4% higher to $27,859 as of 1:15 p.m. in New York. Ether, Solana and Avalanche were also higher.
The labor market’s strength indicates that the Federal Reserve will likely continue to raise interest rates, already at a 22-year high, by another quarter percentage point this year. Odds of an interest-rate hike by year’s end rose to 56% following the jobs report, from 48%, according to initial market pricing.
“Credit default swaps for many banks have also increased, reigniting concerns about potential bank failures and other economic disruptions if the FED decides to raise rates,” James Butterfill, head of research at CoinShares, said. “As a result, Bitcoin prices have rebounded, with investors viewing it as a safeguard against unsound monetary policies and bank insolvencies.”
Last week, Bitcoin ended the quarter on a down note in its first quarterly decline this year. Over the course of nine weeks ending in mid-September, investors withdrew nearly half a billion dollars from cryptocurrency products, according to a report by CoinShares.
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