Simply put
- Bitcoin has climbed above $97,000.
- Stronger-than-expected job reports have led to discussions about interest rate cuts.
- US stocks have bounced back following Trump’s “liberation day” announcement.
Bitcoin’s price action was set aside until Friday as investors reacted to robust employment reports, which contrasted with some indications of an economic slowdown.
As per a crypto data provider, Bitcoin, the leading cryptocurrency by market cap, recently traded around $97,000, marking a 0.4% increase in 24 hours. It even touched $97,800 earlier in the day, a peak not seen since late February. In contrast, altcoins like XRP and Solana experienced minimal movement, varying from 0.1% to $2.21 and 1.6% to $148, respectively.
The US economy saw the addition of 177,000 non-farm payroll jobs in April, which was significantly higher than the expected 130,000. The unemployment rate stands at 4.2%, a result that’s better than many anticipated.
Earlier this week, some economic growth figures caught attention, marking the first time in three years they had been recorded this way. This sparked optimistic expectations about potential interest rate cuts by the Federal Reserve, as some believe central banks might need to boost an economy potentially facing disruption from Trump’s trade tariffs.
Traders were quite certain by Friday that the Fed would maintain steady rates during the upcoming June policy meeting.
The Wall Street indices have shown growth, with both the S&P 500 and the tech-heavy Nasdaq recovering completely from the initial impact of Trump’s tariff announcement on April 2, which had caused a loss of $5.9 billion in the first quarter.
After recovering from the previous turmoil, US stocks have regained their footing since Trump’s announcement, although the dollar itself “still trades” lower than it did a month ago, according to Mohamed El-Erian, Chief Economic Advisor for Allianz.
“The currency once referred to as the ‘strong dollar’ has faced some challenging times,” he noted, triggering discussions about whether this trend is mainly cyclical or indicative of a more systemic issue.
The US Dollar Index, which tracks the value of the dollar against a basket of currencies, has dropped by 3.7% over the last month. Meanwhile, gold prices have climbed by 3%, reaching approximately $3,200 per ounce.
As Trump’s trade policies have shaken up the existing economic landscape and raised concerns about a recession, asset manager and crypto strategist Matt Mena pointed out a notable shift: investors are increasingly looking to Bitcoin as a safe haven, akin to gold.
This week’s PCE reading suggested that inflation was cooling in March, which some view as a signal of potential economic contraction. Mena remarked, “PCE and GDP data have rekindled fears of a recession, prompting investors to turn to Bitcoin as a secure asset amid uncertainty.”
Edited by James Rubin
