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Cryptocurrency Bitcoin Experiences Surge Following Positive Wall Street Recovery on Sturdy Employment Data Report
Bitcoin surpassed the $97k mark recently.A robust jobs report reduced rate cut expectations.Wall Street bounced back after Trump's announcement.
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Meet SCENEBitcoin took a small leap forward on Friday, as investors mulled over a strong jobs report and indicators of a slowing economy. The cryptocurrency champion was selling at around $97,000, climbing 0.4% over the past day, according to crypto data giant, CoinGecko. Bitcoin skyrocketed to over $97,800 at one point during the day, reaching its highest point since late February. Altcoins like Ripple and Solana, on the other hand, saw a minor dip, with Ripple slipping 0.1% to $2.21 and Solana falling 1.6% to $148.
The U.S. economy added an impressive 177,000 non-farm payrolls in April, surpassing the 130,000 jobs that analysts anticipated, while the unemployment rate held steady at 4.2%, according to Trading Economics. This labor market data contradicted an economic growth reading from earlier in the week, which suggested that the U.S. economy shrank for the first time in three years. The news ignited hopes of rate cuts from the Federal Reserve, assuming that the central bank might need to stimulate an economy potentially crippled by Trump's trade tariffs.
Traders grew cautious on Friday about the Fed holding rates stable at the end of its June meeting, with the odds increasing from 42% to 66%, as per CME FedWatch.
Wall Street indices escalated, with the S&P 500 and Nasdaq regaining the ground lost following Trump's April 2 announcement of "reciprocal" tariffs. Strategy's stock climbed 3.4% to $395 per share, despite posting a staggering $5.9 billion loss in the first quarter, disclosed a day prior.
Despite Wall Street indices rebounding after the April 2 announcement, the dollar is reportedly "still reeling" compared to its position a month ago, Allianz Chief Economic Advisor Mohamed El-Erian stated on X (formerly Twitter) on Friday. "The once mighty dollar is facing some tough times," he said. "This is stirring quite a debate about whether it's primarily a cyclical or secular phenomenon."
The U.S. Dollar Index (DXY), which tracks changes in the dollar's value relative to a basket of other currencies, has plummeted 3.7% over the past month, according to Yahoo Finance. Meanwhile, gold has shot up by 3% to approximately $3,200 per ounce.
As Trump's trade war threatens to disrupt the current economic order and potentially push the U.S. economy into a recession, Matt Mena, a crypto research strategist at asset manager 21Shares, recently contended to Decrypt that Bitcoin is being viewed as a safe-haven, similar to gold. Mena highlighted this week's PCE reading, which showed a decrease in inflation in March, and a contraction in Gross Domestic Product, as evidence for this shift in perspective.
"The PCE and GDP data sparked worries over stagflation and a potential recession. In response, investors are increasingly allocating their funds into Bitcoin, viewing it as a haven amid economic uncertainty, particularly due to its non-sovereign, capped supply nature," Mena explained.
Edited by James Rubin
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Insights
Enrichment Data:- Bitcoin Price Wave: Bitcoin's recent $97k surge was a combination of strong labor market data, institutional investment, global economic indicators, favorable regulatory conditions, and technical indicators, all joining hands to create a favorable environment for the cryptocurrency.
- Fed Rate Cuts: While the prospects of Fed rate cuts did not play a direct role in triggering Bitcoin's price surge, they may influence investor appetite for riskier assets like Bitcoin due to reduced opportunity costs.
- Robust Labor Market: Strong labor market data contributes positively to investor confidence and market sentiment, boosting Bitcoin's price indirectly.
- Trade Tensions and Bitcoin: Bitcoin may act as an alternative haven in times of economic uncertainty, such as during trade tensions. This is primarily due to its non-sovereign and capped supply nature.
- The cryptocurrency Bitcoin surged to around $97,000 recently, marking its highest point since late February, as investors considered strong labor market data and indicators of a slowing economy.
- Despite Wall Street bouncing back after Trump's announcement, the U.S. Dollar Index has plummeted 3.7% over the past month, according to Yahoo Finance, with gold shooting up by 3%.
- Matt Mena, a crypto research strategist at asset manager 21Shares, contends that Bitcoin is increasingly being viewed as a safe-haven amid economic uncertainty, due to its non-sovereign, capped supply nature.
- Institutional investment, global economic indicators, favorable regulatory conditions, and technical indicators have joined hands to create a favorable environment for Bitcoin's recent $97k surge.
- The prospects of Fed rate cuts may influence investor appetite for riskier assets like Bitcoin, as they reduce opportunity costs.
