Bitcoin rises as weaker US jobs data bolsters Fed easing expectations

Bitcoin traded higher on Thursday after a weaker-than-expected U.S. jobs report reinforced expectations that the Federal Reserve could begin lowering interest rates later this year, improving the outlook for liquidity-sensitive assets.

The June employment report showed the U.S. labor market continued to cool without signs of a sharp deterioration. 

Treasury yields and the U.S. dollar fell after the release. At the same time, traders increased bets on monetary easing, providing a supportive backdrop for cryptocurrencies.

US hiring slows as prior payroll gains are revised lower

The U.S. economy added 57,000 nonfarm jobs in June, down from a revised 129,000 in May, according to the Bureau of Labor Statistics. The unemployment rate edged down to 4.2% from 4.3%, while average hourly earnings rose 0.3% over the month and 3.5% from a year earlier.

The report also revised April and May payroll figures down by a combined 74,000 jobs, indicating hiring had been weaker than previously estimated. 

Meanwhile, the labor force participation rate slipped to 61.5% from 61.8%. This suggests fewer Americans were either working or actively seeking employment.

Employment gains were concentrated in professional and business services, health care, and social assistance. Leisure and hospitality shed 61,000 jobs, reflecting weaker-than-usual seasonal hiring.

Treasury yields, dollar retreat as markets price in easier policy

Financial markets interpreted the report as supportive of a less restrictive monetary policy path.

Bitcoin and Ether both moved higher following the release as investors rotated into risk assets. At the same time, U.S. Treasury yields declined, with the policy-sensitive two-year yield falling alongside the benchmark 10-year yield. 

The U.S. Dollar Index also weakened as traders reassessed the outlook for interest rates.

The report strengthened expectations that the Fed could begin easing policy if upcoming inflation data continue to moderate. Lower interest rates generally improve financial conditions by reducing borrowing costs and supporting liquidity. 

This backdrop has historically benefited cryptocurrencies and other risk assets.

Fed expectations remain in focus

While the jobs report alone is unlikely to determine the Fed’s next policy decision, it adds to evidence that the labor market is gradually losing momentum rather than overheating.

That leaves upcoming inflation releases, including the Consumer Price Index and Personal Consumption Expenditures data, as the next major catalysts for markets assessing the timing of the central bank’s first rate cut.

For crypto investors, the combination of softer hiring, lower Treasury yields, and a weaker dollar reinforces the macro conditions that have supported digital assets during previous easing cycles.

Final Summary

• The U.S. added 57,000 jobs in June, while April and May payrolls were revised down by a combined 74,000, pointing to a cooling labor market.
• Bitcoin gained as Treasury yields and the U.S. dollar fell, reinforcing expectations that the Federal Reserve could move closer to cutting interest rates if inflation continues to ease.