Summary:
Bitcoin (BTC) is a focal point for investors amid recent nonfarm payrolls data.
US added 256,000 jobs in December, exceeding predictions by 100,000 jobs.
Analysts suggest the Fed's rate cuts may be over, impacting Bitcoin negatively.
Bitcoin is currently trading at $94,028, down 3.45% over the past week.
Bullish sentiment remains due to historical performance and institutional interest.
Bitcoin's Current Landscape
Bitcoin (BTC) remains the center of investors’ attention as new nonfarm payrolls data from the US Bureau Of Labor Statistics (BLS) emerges. With the market sentiment still bullish, the recent economic developments in the US raise questions about the macroeconomic factors that could impact Bitcoin in 2025.
Currently, Bitcoin is trading above $94,000, having experienced a 3.45% loss over the past week.
Fed’s Rate Cuts: A Dead End?
In a recent analysis by The Kobeissi Letter, the employment summary for December 2024 revealed that nonfarm payrolls employment rose by 256,000 jobs, exceeding expectations by 100,000. This marks the highest six-month average of 165,000 jobs since July 2024.
The analysts suggest that the US Federal Reserve's decision to initiate interest rate cuts in September 2024 may have been misguided, given the current job growth and inflation levels. As a result, the Fed is anticipated to halt rate cuts and potentially introduce rate hikes to combat inflation driven by strong job data.
Impact on Bitcoin
The absence of rate cuts or the introduction of rate hikes generally poses a negative outlook for Bitcoin. Lower interest rates typically encourage investment in riskier assets like cryptocurrencies. Following the Fed's announcement of potential rate reductions for 2025, Bitcoin suffered a flash crash of over 9% in mid-December as investors sought to stabilize their positions.
The Kobeissi Letter forecasts a 44% probability that no rate cuts will occur through June 2025.
Bitcoin Price Overview
As of now, Bitcoin is priced at $94,028, reflecting a slight 0.22% gain in the last 24 hours. However, it remains down 3.72% over the past week and 6.35% over the past month.
Despite the looming threat of reduced rate cuts, Bitcoin investors are likely to maintain bullish sentiments due to:
- Historical price performance during bull cycles
- An anticipated pro-crypto US government
- Ongoing institutional investments via spot ETFs
With a market cap of $1.84 trillion, Bitcoin continues to hold its position as the largest cryptocurrency and the eighth largest asset in the world.
Featured image from Investopedia, chart from Tradingview
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