Crypto markets quickly sold off in mid-morning U.S. Friday hours even as August employment data argued for a quick pace of monetary easing from the Federal Reserve.
At first, news that the U.S. added just 22,000 jobs last month had all markets – crypto, stocks, bonds and gold — in rally mode amid anticipation of the Fed cutting its benchmark interest rate 25 or even 50 basis points later in September.
Things, however, quickly reversed following the opening of the stock market. Leading the way lower, was ether (ETH), which shed nearly 4% in a manner of minutes and is now down by 1.5% over the past 24 hours at $4,279. Solana SOL$203.19 and XRP XRP$2.8198 suffered similar percentage-wise declines. Bitcoin BTC$110,788.41 outperformed a bit, sliding closer to 2.5%, but still remaining slightly higher over the past day at $110,500.
U.S. stocks reversed early gains, with the Nasdaq now down 0.6% and S&P 500 0.7%. Gold, however, continues to attract capital — though lower by a hair since touching a record high of $3,654 following the jobs data, the yellow metal is still up 0.9% for the session.
“There’s barely been any job growth in the past 4 months,” Heather Long, chief economist at Navy Federal, wrote on X. “The Federal Reserve has to cut in September. And maybe October now.”
Traders on the Chicago Mercantile Exchange (CME) have shifted their opinion on the size of the Fed’s cut in September. Before this morning’s report, odds of a 25 basis point rate cut were essentially 100%, but that’s now slipped to 86%, with a 14% chance of a 50 basis point move.
President Trump also weighed in on his Truth Social: Jerome ‘Too Late”‘Powell should have lowered rates long ago. As usual, he’s ‘too late’.”
“The warning bell that rang in the labor market a month ago just got louder,” said Olu Sonola, Head of US Economic Research at Fitch Ratings. “A weaker-than-expected jobs report all but seals a 25-basis-point rate cut later this month,” he continued. “Near term, the Fed is likely to prioritize labor market stability over its inflation mandate, even as inflation drifts further from the 2% target. Four straight months of manufacturing job losses stand out. It’s hard to argue that tariff uncertainty isn’t a key driver of this weakness.”
A check of crypto-related stocks finds this week’s sizable weakness continuing. Coinbase (COIN) is lower by 4%, Circle (CRLC) by 7.5%, Strategy (MSTR) by 1.5%, MARA Holdings (MARA) by 3.2%, and Sharplink Gaming (SBET) by 6%.
