US September Job Growth Significantly Exceeds Expectations, Driving Bitcoin Rally
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- The U.S. Adds 254,000 New Jobs in September - Bitcoin Rises Driven by Decreased Holdings on Centralized Exchanges [Unblock Media] The U.S. Bureau of Labor Statistics announced that the economy added 254,000 jobs in September, significantly surpassing economists' forecast of 140,000 new jobs. Robust employment data indicates strong economic growth, signifying an increase in consumer and business activities. Such positive employment data stimulates investor sentiment towards risk assets like Bitcoin, further reinforcing confidence in the strength of the U.S. economy. Along with economic growth, the potential for interest rate cuts by the Federal Reserve has increased investors' risk tolerance, contributing to the rise in Bitcoin prices. On September 18, the Federal Reserve cut the federal funds rate by 0.5%, a move prompted by slower inflation and economic growth in August. Less than 160,000 jobs were added in August, and the annual inflation rate fell below 3%. However, the strong employment data for September suggests that rates may not be significantly reduced in the upcoming Fed meeting. According to CME FedWatch, current futures market pricing indicates that rates are not expected to be cut by more than 0.25% at the next Fed meeting. The current target rate is around 4.75%. Lower interest rates reduce borrowing costs for businesses and individuals, stimulating economic activities and positively affecting investor sentiment. Additionally, lower rates decrease the yields on traditional financial assets, prompting investors to turn to alternative assets like Bitcoin. This has a positive effect on Bitcoin prices as well. Following strong employment data in September, Bitcoin prices surged above an intraday high of $62,300 on October 4. This aligns with the "Uptober" concept, which suggests strong performance for Bitcoin in the fourth quarter. Meanwhile, the quantity of Bitcoin held on centralized exchanges has decreased to 2.8 million, the lowest level since 2018. This indicates a strategic shift among investors towards long-term holding of Bitcoin. Since Bitcoin held on centralized exchanges is typically used for trading purposes, a reduction suggests lower selling pressure and decreased supply. A reduced supply creates upward pressure on prices, making the decrease in exchange holdings a positive signal for Bitcoin prices. Amid such circumstances, the Bitcoin market has recovered significantly following the sharp decline on August 5, when Bitcoin plummeted by about 18% in a single day. Grayscale, the largest cryptocurrency asset manager with over $20 billion in assets under management, has considerable influence in the cryptocurrency market. As long as strong economic growth and decreased Bitcoin holdings persist, Bitcoin is likely to continue its upward trend.
