US Jobs Report Shows Cooling Economy
Bitcoin (BTC) remained relatively stable following the release of the US jobs report for October, which showed that the country added 150,000 nonfarm jobs, falling short of economists’ expectations. The unemployment rate rose to 3.9%, higher than estimates, and average hourly earnings grew by 0.2% instead of the predicted 0.3%. These figures, along with lower job numbers for August and September, could prompt the US Federal Reserve (Fed) to consider cutting interest rates in the future.
Higher Unemployment and Lower Jobs Indicate Cooling
The rise in bankruptcies, which increased by 13% in the year ending September 3, has contributed to the rising unemployment rate in the US. Additionally, the autoworkers’ strike may have caused a loss of around 33,000 jobs from the nonfarm payrolls figure. While some market commentators believe that the downturn in employment and wages is promising, it is still too early for the Fed to make any rate cuts. The Fed would need to see sustained trends of lower unemployment and wage growth before changing their course.
Bitcoin’s Response and Growing Exuberance
Bitcoin’s response to the jobs report was muted, but it does not indicate a decline in optimism. The cryptocurrency reached levels not seen since May 2022 earlier this week. On-chain analysis suggests an increase in whale activity, with around 7,000 transactions per day between October 23 and November 1. Furthermore, open interest for Bitcoin call options at $40,000, $45,000, and $50,000 is growing. This indicates growing confidence in Bitcoin’s future performance.
Bitcoin as a Hedge Against Falling Prices
Cathie Wood, the chief of ARK Investment Management, believes that Bitcoin will serve as a hedge against falling prices caused by new technologies in the future. In a recent podcast interview, Wood stated that Bitcoin acts as a hedge against both inflation and deflation due to its lack of counterparty risk and limited institutional involvement. She referred to it as “digital gold.”
Hot Take: Bitcoin Remains Steady Amidst US Jobs Report
Despite the US jobs report showing a cooling economy with lower job numbers and wage growth, Bitcoin has remained relatively stable. The response from the cryptocurrency suggests that optimism in Bitcoin’s future remains high. With growing whale activity and increasing open interest in call options, there is confidence that Bitcoin will continue to perform well. Additionally, experts like Cathie Wood see Bitcoin as a hedge against falling prices caused by new technologies. Overall, Bitcoin’s resilience amidst economic fluctuations highlights its potential as a long-term investment.
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