Bitcoin drops below $80,000 as hot jobs data spurs US Federal Reserve hike bets

Bitcoin dropped as much as 3.5 per cent after stronger-than-expected US jobs data revived bets on a September Federal Reserve rate hike, abruptly reversing the cryptocurrency’s latest push above US$80,000.

The token fell to as low as US$78,649, alongside stocks and bonds after nonfarm payrolls increased 162,000 in August, topping every estimate in a Bloomberg survey, while the unemployment rate held at 4.1 per cent. Two-year Treasury yields climbed and the dollar strengthened.

The reversal gives Bitcoin’s repeated struggle around US$80,000 a fresh macro test. The cryptocurrency had reclaimed the level on Sept 3 as falling yields and a weaker dollar buoyed risk assets after Fed Governor Christopher Waller signalled support for holding rates steady if inflation continued to ease.

“A clear rebound doesn’t settle the debate, it arms the hawks,” said Fabian Dori, chief investment officer at Sygnum Bank. “A strong print validates current September hike probabilities. But Treasury cash balances, bank balance-sheet capacity, private credit creation and stablecoin supply matter independently of short-term Fed decisions.”

Shares of crypto-related companies also declined. Crypto exchange Coinbase Global dropped around 4 per cent, while Bitcoin accumulator Strategy and stablecoin issuer Circle Internet Group each slipped around 1 per cent. BLOOMBERG