Bitcoin price breaks through $50,000, share price declines after disappointing U.S. employment report

The S&P 500 Index fell to its intraday high on September 2, while Bitcoin (Bitcoin) Climbed to the highest level in more than three months. This is because an important report on September 3 showed that the U.S. economy has created fewer jobs than expected, reducing the possibility that the Fed will begin to withdraw from the stimulus plan this year.

U.S. Bureau of Labor Statistics disclose The number of non-farm payrolls (NFP) increased by 235,000 in August, compared with expectations of 733,000. Nevertheless, the unemployment rate fell slightly to 5.2% from 5.4% last month.

The Delta variant FUD behind Bitcoin’s skyrocketing?

The hotel and leisure industry did not increase employment opportunities in August, and in the past six months, it added an average of 350,000 jobs per month. At the same time, the restaurant industry lost 42,000 jobs, indicating concerns about the rapidly spreading COVID-19 Delta variant.

Bitcoin Increased 3.41% to $50,961 It is expected that the slowdown in the US employment sector will prompt the Fed to limit its panic reduction.

Bitcoin 1-hour candlestick chart. Source: TradingView.com

The most famous cryptocurrency in the world Struggle in the second quarter of 2021 With the global economy rebounding from the pandemic. After facing additional headwinds from China’s comprehensive cryptocurrency ban and Elon Musk’s anti-Bitcoin tweets, it fell from approximately $65,000 to below $30,000.

At the same time, the global economic recovery has triggered speculation that central banks will lift huge monetary support.In the United States, Federal Reserve Chairman Jerome Powell Indicates that the Fed will start to shrink By the end of 2021, if the economy achieves “maximum employment”.

However, the Delta variable continues to weaken hopes for a stable recovery of the economy and labor market.In addition, the employment data on September 3 suggests that the Fed will need Continue its $120 billion monthly asset purchase plan.

The outlook pushes the U.S. dollar lower and makes non-income hedge assets such as Bitcoin and gold higher.

Bitcoin price daily chart with spot gold (XAU/USD) and U.S. dollar index (DXY). Source: TradingView

Petr Kozyakov, co-founder and CEO of payment network Mercuryo, said: “The price mark of more than $50,000 reveals two important discoveries about digital currencies.”

“First, the main cryptocurrencies still have inherent characteristics that attract investors and buyers. Second, the price increase has not yet eliminated the volatility surrounding digital assets.”

Kozyakov predicts that loose monetary policy, coupled with the growth of Bitcoin as a recognized financial asset on Wall Street, will push its price to $55,000 in the short term and to $70,000 in the long term.

Unemployment benefits are about to expire

The extremely weak non-agricultural employment report was released a few days before the US government plans to terminate federal unemployment benefits to cushion the economic losses caused by the pandemic.

In addition, the monthly additional assistance of $1,200 for unemployed Americans will expire on September 6. As the number of cases of delta variants in parts of the United States continues to increase, this will effectively reduce assistance to approximately 7.5 million people.

Goldman Sachs famous Unemployment benefits also prevented Americans from applying for jobs throughout July. The banking giant predicts that the termination of September 6 will increase non-agricultural employment to 1.5 million by the end of 2021.

The next Fed meeting will be held in mid-September. In view of the weak non-agricultural report, it is expected that the Fed’s reduction plan will be clearer.

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