Bitcoin Price Exceeds $ 50,000, Shares Fall After Disappointing US Jobs Report

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The S&P 500 slipped towards the intraday highs of September 2 as Bitcoin (BTC) hit its highest levels in more than three months. The moves came as a key September 3 report showed the U.S. economy had created fewer jobs than expected, reducing the likelihood of the Federal Reserve starting to unwind its stimulus package this year.

The United States Bureau of Labor Statistics revealed that the non-farm payroll (NFP) increased by 235,000 in August, against expectations of 733,000 positions. Nonetheless, the unemployment rate edged down to 5.2% from 5.4% the previous month.

OUCH! The US economy adds only 235,000 jobs against 733,000 expected, the slowest gain in 7 months amid Delta’s boom. At least the previous month has been revised up to 1053k from 943k. The unemployment rate falls to 5.2% as expected. Average hourly earnings were above expectations, increased 0.6% MoM vs + 0.3% exp. pic.twitter.com/gQJHLAb54Z

– Holger Zschaepitz (@Schuldensuehner) September 3, 2021 Delta FUD variant behind the Bitcoin pump?

The hospitality and leisure sector saw no job gain in August, unlike its average increase of 350,000 jobs per month over the previous six months. Meanwhile, the restaurant industry has lost 42,000 jobs, signaling fears over the rapidly spreading Delta variant of COVID-19.

Bitcoin rose 3.41% to $ 50,961 in anticipation that a slowdown in the US employment sector would prompt the Federal Reserve to limit its taper tantrum.

Bitcoin hourly candle chart. Source: TradingView.com

The world’s best-known cryptocurrency struggled in the second quarter of 2021 amid a global economic rebound after the pandemic. It fell from around $ 65,000 to under $ 30,000 after facing additional headwinds from a full-fledged crypto ban in China and Elon Musk’s anti-Bitcoin tweets.

At the same time, the global economic recovery has sparked speculation that central banks will withdraw their massive monetary support. In the United States, Federal Reserve Chairman Jerome Powell has said the Fed will start shrinking by the end of 2021 if the economy reaches “maximum jobs.”

But the Delta variant continues to undermine hopes for a stable economic and labor market recovery. Moreover, employment data from September 3 suggests that the US central bank will have to continue its $ 120 billion per month asset purchase program.

The outlook pointed to the weaker US dollar and pushed up non-yielding hedge assets like Bitcoin and gold.

Daily chart of the price of Bitcoin against Spot Gold (XAU / USD) and the US Dollar Index (DXY). Source: TradingView

“The crossing above the $ 50,000 mark revealed two crucial discoveries for digital currency,” said Petr Kozyakov, co-founder and CEO of the Mercuryo payments network.

“The first is that the first cryptocurrency still has the inherent characteristics that attract investors and buyers, and second, the increase in price valuation has yet to eliminate the volatility that surrounds the digital asset. “

Kozyakov predicted that accommodating monetary policies, coupled with Bitcoin’s growth as a recognizable financial asset on Wall Street, would push its prices to $ 55,000 in the short term and $ 70,000 in the long term.

Unemployment benefits expire soon

The extremely weak report from the NFP came just days before the scheduled end of federal unemployment benefits that the US administration put in place to cushion the economic damage caused by the pandemic.

Additionally, additional aid that gives unemployed Americans $ 1,200 per month will expire on September 6. This will effectively cut aid to about 7.5 million people as Delta variant cases increase in parts of the United States.

Goldman Sachs noted that unemployment benefits also prevented Americans from applying for jobs throughout July. The banking giant predicted that the September 6 termination would bring the non-farm payroll to 1.5 million by the end of 2021.

The next Federal Reserve meeting will take place in mid-September and is expected to shed light on the Fed’s reduction plans in light of the weaker NFP report.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move comes with risk, and you should do your own research before making a decision.

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