Bitcoin fell below $80,000 on Friday after a stronger-than-expected jobs report increased the likelihood of a Federal Reserve rate hike, reversing earlier gains in the cryptocurrency.
The U.S. economy added 162,000 jobs in August, nearly triple the 53,000 jobs economists had forecast, according to the Bureau of Labor Statistics. The unemployment rate remained at 4.1%, matching expectations. June and July payrolls were also revised higher.
Bitcoin had climbed to $82,240 earlier Friday—a four-month high—but fell more than 2% to trade near $79,300 within minutes of the jobs report release. The decline reflected market expectations of a higher probability of a Federal Reserve interest rate increase.
Fed funds futures traders priced a 58% chance of a rate hike at the central bank's September 15-16 meeting, up from 49.4% the day before, according to the CME FedWatch tool. Treasury yields rose across the curve, with the two-year note reaching its highest level since January 2025.
Broader markets also declined on the jobs data. The Dow Jones Industrial Average fell 226 points, or 0.4%, while the S&P 500 slid 0.2%. The Nasdaq Composite ticked up 0.1%. Gold fell to a session low of $4,380 an ounce.
Higher interest rates typically make risk-free assets more attractive, raising the return threshold needed for stocks and cryptocurrencies to justify holding them over U.S. treasuries. Rate increases also tend to strengthen the dollar, which weighs on dollar-priced assets like Bitcoin and gold.
Despite Friday's decline, spot Bitcoin ETFs logged $730.8 million in net inflows. Overall crypto market capitalization held near $2.67 trillion, up 0.11% on the day. The Fear and Greed Index read 75, remaining within greed territory, though bullish sentiment had receded from the previous week's extreme greed readings.
The Federal Reserve's rate decision is scheduled for September 15-16, marking the first potential hike under consideration since the tightening cycle ended in July 2023. The next jobs report, covering September payrolls, is due October 2.
