As Crypto Rallies on Strong Jobs Data, Analysts Speculate on Powell’s Next Move

The Fed has kept an eye on labor statistics in recent months with the hopes of gauging the odds of a recession

share

key takeaways

  • July’s jobs data crushed expectations
  • Additional 75 basis point hikes, or more, are likely to come, analysts said

Jobs data released Friday showed strong growth in the workforce and a decline in unemployment, suggesting a Federal Reserve policy pivot may not come in September. 

The US economy added 528,000 jobs in July, more than doubling analysts’ expectations, according to data from the Bureau of Labor Statistics. The unemployment rate also marginally dipped from 3.6% to 3.5% last month. 

The Fed has kept an eye on labor statistics in recent months with the hope of gauging the odds of a recession. Strong jobs data will likely validate Fed Chair Powell’s recent rate-hiking moves, analysts said. 

“Numbers this strong push back strongly against the idea that we’re close to peak inflation or peak hawkishness,” Tom Essaye, founder of Sevens Report Research, wrote in a note Friday. “The looming CPI report could keep any market fallout from being too intense (as hope for a soft CPI should support assets) but we’d still expect moderate declines.”

Stocks traded sideways Friday, while cryptocurrencies extended recent gains. The S&P 500 was trading down 0.5% and the tech-heavy Nasdaq lost about 1% Friday late in the trading session. Bitcoin and ether gained 0.8% and 4.2%, respectively. 

Friday’s jobs data comes a day after asset manager BlackRock said it would begin facilitating institutional cryptocurrency trading through Coinbase’s prime brokerage service. The exchange’s stock rallied more than 30% Thursday before paring gains. 

“There was, what has become, a rare good news headline for bitcoin on Thursday after Coinbase was chosen to provide crypto services to Blackrock’s clients,” Craig Erlam, a senior market analyst at OANDA, wrote Friday. “This is a big show of support for an asset class that’s had a frankly terrible year so far. But clearly, there remains strong demand for cryptos which bodes well for the future.”

It is hard to say how long the turnaround for COIN and the broader crypto market will last, analysts agreed, but on the whole, it shows the industry moving in a positive direction. 

“While small and retail investors have been virtually shaken out of the space over the past few months, institutions are now making a comeback,” said Mikkel Mørch, executive director at digital asset investment fund ARK36. “Evidently, big players like BlackRock see neither the recent slump in prices nor the waves of bankruptcies among crypto companies as evidence that it’s over for cryptocurrencies or that there is something fundamentally wrong with this asset class.”


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Top Icon.png

Research

Osmosis thrived in H2 2023 on the back of increased DeFi activity deriving from recently launched Cosmos-related projects and better market conditions. With new value accrual mechanisms for the native token, Osmosis is well-positioned to continue its strong performance in 2024.

/

article-image

Though the opposing flow trend is likely to slow over time, industry watchers note, bitcoin fund assets could one day eclipse the $90 billion gold ETF space

article-image

Celestia had the first mover advantage. EigenDA has staked ether. What sets Avail apart?

article-image

Bitcoin moved 1% higher Monday morning in New York, Matrixport analysts say $62,000 could happen next month

article-image

It’s hard to believe right now that crypto — even with all of its flexibility and massive capabilities — could ever be like cash on the internet

article-image

Michael Saylor announced Monday morning that MicroStrategy bought 3k more bitcoin after the X account was compromised over the weekend

article-image

Plus, Pudgy Penguins grows its brand and a group of Autoglyphs sell for $14.5 million