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Cryptocurrency prices rose slightly after the U.S. published another weak nonfarm payroll report.
Bitcoin (<a href="https://crypto.news/price/bitcoin/" target="_blank" rel="noopener noreferrer nofollow">BTC</a>) rose to $56,500 while Ethereum (<a href="https://crypto.news/price/ethereum/" target="_blank" rel="noopener noreferrer nofollow">ETH</a>) jumped to $2,400 on Friday, Sept. 6.
In the latest report, the Bureau of Labor Statistics <a href="https://www.bls.gov/news.release/pdf/empsit.pdf" target="_blank" rel="noopener noreferrer nofollow">showed</a> that the economy added 142k jobs in August, lower than the median estimate of 164k. The bureau also revised the July figure from 114k to 86k. On Sept. 5, a report by ADP showed that the private sector created just 99,000 jobs in August.&nbsp;
The unemployment rate slipped to 4.2% from the previous 4.3%, while average hourly earnings rose by 3.8%.
These figures indicate that the labor market is not performing well, as companies remain concerned about the economy. The manufacturing sector, in particular, is struggling, as reports from the Institute of Supply Management and S&amp;P Global showed it remained in <a href="https://seekingalpha.com/article/4718753-ism-manufacturing-index-contracts-for-5th-straight-month" target="_blank" rel="noopener noreferrer nofollow">contraction mode</a> in August. According to the BLS, 24,000 jobs were lost during the month.&nbsp;
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 Unemployment data finalized! – JOLTS Job Openings –&gt; worst in 3 years. – ADP Non-Farm Employment Change –&gt; worst in 3 years. – Non-Farm Employment Change –&gt; 2nd worst in 3 years (last month was worse). Result:<a href="https://twitter.com/hashtag/Gold?src=hash&amp;ref_src=twsrc%5Etfw" target="_blank" rel="noopener noreferrer nofollow">#Gold</a> moves upwards as there's more uncertainty surrounding the…— Michaël van de Poppe (@CryptoMichNL) <a href="https://twitter.com/CryptoMichNL/status/1832034526442266965?ref_src=twsrc%5Etfw" target="_blank" rel="noopener noreferrer nofollow">September 6, 2024</a>
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As a result, the NFP data suggest that the Federal Reserve <a rel="noopener noreferrer nofollow" href="https://crypto.news/bitcoin-raced-to-62k-as-fed-teased-september-rate-cut/">may cut interest rates</a> at its meeting on Sept. 18. There is a likelihood it could deliver a substantial rate cut of 0.50%, which explains why government bond yields have retreated. The 10-year yield fell to 3.75%, while the 30-year dropped to 3.9%.
You might also like: <a rel="noopener noreferrer nofollow" href="https://crypto.news/polymarket-78-of-users-wager-on-25bp-fed-rate-cut/"> Polymarket: 78% of users wager on 25bp Fed rate cut </a>
<h2 class="wp-block-heading" id="implication-for-cryptocurrencies">Implication for cryptocurrencies</h2>
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 Bitcoin price | Chart by <a href="https://www.tradingview.com/symbols/BTCUSD/?exchange=CRYPTO" target="_blank" rel="noopener noreferrer nofollow">TradingView</a>
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In theory, cryptocurrencies and other risky assets perform well when the Fed is cutting interest rates. A notable example occurred in 2018 when the Fed raised rates from 1.25% in March to 2.50% in December, causing Bitcoin to fall by over 84% between its highest and lowest levels.
Bitcoin then rebounded by over 350% in 2019 as the Fed slashed rates by 0.75%. A similar trend occurred in 2020 at the onset of the pandemic when the Fed cut rates to zero.
At that time, Bitcoin rose to a record high of $69,000 before plunging in 2022 as the bank hiked rates.
A likely reason for this trend is that investors tend to have a higher risk appetite in low-interest-rate environments. If the Fed cuts rates, there is a possibility that some of the trillions of dollars in money market funds will rotate to risk assets like stocks and crypto.
However, there is a risk that Bitcoin and other cryptocurrencies could retreat since the rate cut has already been priced in by market participants.
You might also like: <a rel="noopener noreferrer nofollow" href="https://crypto.news/ondo-finance-token-at-risk-if-fed-begins-cutting-rates/"> Ondo Finance token at risk if Fed begins cutting rates </a>

Bitcoin and altcoins rise as US jobs report hint at large rate cut

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