Bitcoin Soars Past $87,000 as Weak Labor Data Bolsters Easing Case
The price of Bitcoin surged past $87,000 on Friday morning, marking its first breach of this threshold since September 23. This rally coincided with the release of September nonfarm payrolls (NFP) data showing near-flat employment growth and an unemployment rate increase to 4.2%.
According to Bitstamp data, prior to surging, Bitcoin's price was stuck in the $84,500 to $85,000 range until late Thursday. However, an hour before midnight, it began climbing, gradually rising to $85,500 before a sharp rally added more than $1,000 in under 30 minutes to reach $86,780.
A brief period of relative volatility followed as the price fluctuated between $85,500 and $86,000 before another gradual climb pushed Bitcoin to an intraday peak of $87,219. A rejection at $87,000 sent it lower before finding support above $85,000, leaving it with a daily gain of nearly 1% at a recent price of $85,188.
As expected, Bitcoin's sudden upward surge caught traders shorting the cryptocurrency by surprise. Coinglass data shows that in the last 24 hours, $142 million in Bitcoin short bets were liquidated versus about $29 million in longs. This is a marked increase from approximately $35 million in leveraged positions liquidated a day earlier.
The weak labor market gives the Federal Reserve clear justification to accelerate monetary easing. Lower benchmark interest rates reduce risk-free real yields, diminishing the opportunity cost of holding non-yielding, fixed-supply assets such as Bitcoin. Furthermore, the weak payroll data placed immediate downward pressure on the U.S. dollar, and given Bitcoin's historical inverse correlation with the greenback, a softer dollar provides direct tailwinds for Bitcoin.
The SEC has proposed modernized crypto custody rules that would permit advisors and funds to hold client cryptocurrency directly if no qualified custodian is available. This proposal recognizes that third-party qualified custodians may not be available for certain novel digital assets. The SEC announced a 60-day public comment period following the proposal's official publication in the Federal Register.