Bitcoin Slips Back Below $80,000 as Strong US Jobs Data Fuels September Fed Rate-Hike Bets

Bitcoin fell back below $80,000 after U.S. employment data for August came in well above market expectations. The stronger-than-expected report renewed expectations of a Federal Reserve rate increase in September, adding selling pressure across risk assets.

According to Bloomberg on September 4, Bitcoin dropped as much as 2.8% to $79,197 after the U.S. jobs report was released. U.S. stocks and bond prices also fell, while the two-year Treasury yield rose and the dollar strengthened.

U.S. nonfarm payrolls increased by 162,000 in August, topping all estimates compiled by Bloomberg. The unemployment rate held at 4.1%, unchanged from the previous month. With labor-market strength exceeding expectations, markets are again pricing in a higher probability of a rate increase at the Federal Open Market Committee's September 16 meeting.

Bitcoin had reclaimed $80,000 a day earlier after Federal Reserve Governor Christopher Waller said he could support keeping rates unchanged if inflation continues to slow. Lower Treasury yields and a weaker dollar helped support the move. But the stronger jobs data quickly wiped out those gains.

Fabian Dori, chief investment officer at Sygnum Bank, said a clear rebound in employment does not end the rate debate, but it does strengthen the hawkish case. The strong data also supports the market's current pricing for a September rate increase.

He added that the Treasury's cash balance, banks' funding capacity, private credit creation and stablecoin supply are also variables that influence the digital-asset market, separate from the Fed's near-term rate decision.