U.S. latest employment data was far stronger than market expectations, prompting investors to reassess the Federal Reserve’s interest-rate path.
Bitcoin briefly rose to about US$82,200 to US$82,400 on September 4 U.S. Eastern Time, reaching its highest level since mid-May, but quickly reversed after the nonfarm payrolls report was released, falling below US$80,000 and at one point retreating to about US$79,000, erasing about 3% from its pre-data high.
As of 2:00 p.m. Taipei time on September 5, Bitcoin was trading at about US$79,581, down roughly 1.73% from the previous closing price; the intraday trading range was about US$78,723 to US$81,370, showing that the US$80,000 level remained in repeated contention.
Non-farm payrolls added 162,000 jobs, nearly three times expectations
The U.S. Bureau of Labor Statistics said August non-farm payrolls increased by 162,000, far above Reuters’ survey forecast of 56,000 and the largest gain in five months. July’s figure was sharply revised from a prior decrease of 23,000 to an increase of 21,000; June was also revised from an increase of 20,000 to 31,000, bringing the combined upward revision for the two months to 55,000.
The unemployment rate remained at 4.1%, but the labor force increased by 683,000 in a single month, and the labor force participation rate rebounded from 61.4% in July to 61.6%; employment in the household survey also rose by 569,000. This shows that the unemployment rate did not fall because more people left the labor market; rather, as labor supply increased, job demand was still sufficient to absorb the additional population.
By sector, restaurants and bars added 59,000 jobs, local government education added 42,000, manufacturing added 16,000, and healthcare added 13,000; information sector jobs fell by 23,000. Restaurants and bars, together with local government education, accounted for most of the growth in this non-farm payroll report.
Wage growth slowed, and the report was not uniformly inflationary
Although job gains far exceeded expectations, wage data did not rise sharply in tandem. In August, average hourly earnings increased 0.3% month on month to $37.75; year-on-year growth was 3.1%, below July’s 3.2%. Average weekly hours also edged up from 34.3 to 34.4 hours.
This means the impact of the employment report on monetary policy mainly comes from the fact that the economy still has the capacity to withstand higher interest rates, rather than from an abrupt surge in wage inflation. With the labor market remaining stable, the Fed can focus more on energy prices and overall inflation, reducing the need to ease policy in the near term.
The probability of a September rate hike rebounded to about 60%
After the data was released, the market’s estimated probability of a 25-basis-point rate hike at the Fed’s September 15-16 meeting rose from 49.4% the previous day to 58.4%; some intraday data showed the probability at one point reached 61%. The current federal funds target range is 3.50% to 3.75%; if raised by 25 basis points, it would move to 3.75% to 4.00%.
After the non-farm release, Citi pushed back its forecast for the Fed’s next rate cut to June 2027 and canceled its previous expectations for cuts in October 2026, December 2026, and January 2027, providing more direct evidence that a strong non-farm report weakens rate-cut expectations.
Interest-rate markets quickly repriced. The U.S. two-year Treasury yield, which is more sensitive to policy expectations, at one point rose by about 8 basis points before trimming gains to 5 basis points, to 4.38%; the 10-year yield rose to about 4.776%. The dollar index rose 0.2% to 99.12, while gold fell about 1.2%.
Bitcoin plunged sharply from above $82,000
Bitcoin extended the previous day’s gains before the non-farm payroll release, briefly touching around $82,164, with some trading platforms showing highs near $82,400. However, after the data was released, the price dropped more than $2,000 in a short time, fell below $80,000, and dipped to around $79,000 to $79,300.
Bitcoin itself does not generate fixed interest. When U.S. Treasury yields rise, investors can earn higher returns from lower-risk dollar assets, reducing the relative appeal of non-yielding assets like Bitcoin; at the same time, a stronger dollar and higher financing costs can also squeeze market leverage and the valuation of high-risk assets.
The round-the-clock trading nature of cryptocurrencies allows prices to be repriced immediately after macro data is released. Before the U.S. stock market had fully reflected the report’s impact, Bitcoin had already fallen from above $82,000 back to around $79,000, showing that in the short term it remains highly influenced by U.S. rate expectations and derivatives positioning.
ETH, XRP and SOL were also under pressure
Selling pressure also spread to major cryptocurrencies. As of 3 p.m. Taipei time on September 5, Ether was trading around $2,451, down 2.29% from the previous close; Solana was around $101.86, down 1.77%; and XRP was around $1.40, down 3.45%. XRP fell more than Bitcoin, indicating that some large high-volatility tokens were facing more pronounced de-risking.
U.S. stocks also came under pressure from more hawkish rate expectations. On September 4, Eastern Time, the Dow Jones Industrial Average fell 0.51%, the S&P 500 fell 0.38%, and the Nasdaq Composite fell 0.29%, reflecting that the repricing triggered by the non-farm data was not limited to the crypto market.
ETFs are still attracting funds, with no sign of a full institutional retreat
Notably, as Bitcoin fell below $80,000, U.S. spot Bitcoin ETFs did not turn to net outflows. Farside Investors data showed that related ETFs still recorded $174.6 million in net inflows on September 4, with BlackRock’s IBIT bringing in $117.4 million and Fidelity’s FBTC bringing in $57.2 million.
Together with the $730.8 million on September 3, the two trading days saw inflows of about $905.4 million in total. This suggests the current decline is more like a repricing of macro rates and short-term trading positions, rather than a collective redemption by ETF investors. However, ETF inflows still could not offset the immediate pressure from rising bond yields, a stronger dollar, and de-risking in leveraged trades.
Inflation data becomes the next test
Strong non-farm payrolls have increased the likelihood of a Fed rate hike, but the September policy outcome is not yet fully decided. Annual wage growth slowed to 3.1%, suggesting the labor market may not be generating new wage inflation; therefore, the next batch of consumer price and producer price data will be key evidence for whether the Fed will raise rates.
For Bitcoin, the immediate test is whether it can reclaim and hold above $80,000. If inflation data comes in above expectations, rate-hike bets could rise further, and the dollar and U.S. Treasury yields may continue to strengthen, causing Bitcoin to retest the recent low near $78,000. Conversely, if inflation cools noticeably, even with a strong labor market, the Fed may still choose to keep rates unchanged, creating conditions for Bitcoin to challenge the $82,000 area again.
The August non-farm report showed a combination of “strong employment growth, stable unemployment, and slightly slower wage inflation.” For the real economy, this is a positive signal, but for the crypto market, which had been hoping for monetary easing, it creates a classic “good news becomes bad news” move.
"Bitcoin loses $80,000! Stronger-than-expected U.S. non-farm data boosts bets on a rate hike" was first published on (Blockcast).