August Job Gains Exceed Expectations at 187K, with Unemployment Rate Bumps Up to 3.8%

As the SEC postponed decisions on several new applications, dashing hopes for a spot bitcoin ETF, cryptocurrency enthusiasts are pinning their aspirations on a potential economic slowdown and declining interest rates to serve as a favorable catalyst.

In August, the United States saw an increase of 187,000 jobs, surpassing the expected figure of 170,000 and marking an improvement from July's revised number of 157,000 (revised from 187,000). However, the unemployment rate for August reached 3.8%, contrary to forecasts predicting 3.5%, mirroring the rate from the previous month.

Following the release of the Bureau of Labor Statistics report on Friday morning, the price of bitcoin (BTC) remained relatively stable, hovering just above $26,000. Nevertheless, traditional markets exhibited notable reactions, with U.S. stock index futures trending upward while the U.S. dollar and Treasury yields experienced a decline.

The past week had been a rollercoaster for bitcoin, initially surging to over $28,000 on Tuesday after Grayscale's legal victory over the SEC, which was pursuing the conversion of its Bitcoin Trust (GBTC) into a spot bitcoin ETF. However, consistent with recent trends, bitcoin's gains were short-lived and began to recede. The situation worsened on Thursday when bitcoin plunged by over 4%, dropping below $26,000, as the SEC delayed its decisions on numerous spot bitcoin ETF applications, including those from prominent entities like BlackRock and Fidelity.

Given the shelving of ETF hopes for potentially an extended period, bitcoin advocates may be banking on an economic slowdown and reduced interest rates as potential triggers for positive market movements. While this morning's report did include indicators such as a rising unemployment rate and a downward revision of July's job additions, bitcoin, at least for now, has not displayed any notable positive reaction.

Examining further details of the report, it was revealed that average hourly earnings grew by 0.2% in August, falling slightly short of the anticipated 0.3% and down from July's 0.4%. On an annual basis, average hourly earnings increased by 4.3% in August, slightly lower than the predicted 4.4%, and a decline from July's 4.4%.

The CME FedWatch Tool continues to indicate that traders are anticipating the U.S. Federal Reserve to maintain its current stance at the upcoming September meeting. The likelihood of an interest rate increase at the beginning of November remains relatively low, with only a roughly one-in-three chance.