Bitcoin Plunges $1,600 as Strong Jobs Report Shifts Fed Hike Bets
The U.S. jobs report for August showed an unexpectedly strong employment growth of 162,000 nonfarm jobs, exceeding economists' forecast of 56,000. The data release sparked a sudden shift in market expectations about future Federal Reserve policy, causing Treasury yields to rise and the dollar to strengthen.
This unexpected development had a significant impact on Bitcoin's price, which dropped by $1,600 within three minutes, falling below $80,000. This reaction highlights how leveraged crypto positions respond to rate expectations, with higher expected rates making non-yielding assets less attractive than interest-bearing alternatives.
Institutional demand provided some support for Bitcoin as exchange-traded funds recorded their strongest daily inflows of $730 million on September 3, according to data cited by Yahoo Finance. However, this demand does not guarantee sustained price support, and the key question is whether institutional buying can absorb macro-driven selling.