Bitcoin Climbs as U.S. Rate Hike Odds Drop to 18 Percent

Bitcoin (BTC) climbed on October 5 as the likelihood of another U.S. Federal Reserve interest rate hike diminished. Financial markets now assign just an 18% chance of a rate increase at the October 28 policy meeting, a sharp drop from the 70% probability anticipated at the end of September.

The shift in market sentiment followed a disappointing U.S. jobs report, which revealed that employers added only 29,000 jobs in September, far below the 84,000 jobs economists had forecasted. The unemployment rate also rose to 4.2%, while wage growth slowed to its weakest pace since May 2021.

Lower interest rates typically boost risk assets like Bitcoin and other cryptocurrencies. As a result, BTC gained 1% on October 5, trading near $86,000 U.S. Ethereum (ETH) and Dogecoin (DOGE) also saw gains as investors reacted positively to the reduced chances of further rate hikes.

The Federal Reserve had raised interest rates by 25 basis points in September, its first hike in three years, to combat persistent inflation. However, the weak jobs data now suggests a pause in rate hikes, benefiting Bitcoin and other digital assets.