Rate Hikes Boost Expectations, But Crypto Market Holds Firm
Strong U.S. employment data has boosted rate-hike expectations, but Bitcoin and other cryptocurrencies have shown relative strength, bucking the trend among traditional risk assets.
The August nonfarm payrolls report revealed a surprise 162,000 job gain, far exceeding market forecasts of around 53,000. This lifted the probability of another interest-rate increase to about 60%, causing some investors to shift their capital out of stocks and gold.
However, cryptocurrencies have benefited from this reallocation, with Bitcoin delivering the strongest performance among major asset classes except crude oil last week.
In fact, U.S. spot Bitcoin ETFs recorded net inflows of $987 million last week, marking a third consecutive week of positive flows, and cumulative net inflows over the past three weeks reaching approximately $3.8 billion.
According to Wintermute, the strong jobs report failed to break the crypto market's momentum, which is being driven by capital reallocation as gains in the stock market slow down.