Bitcoin Drops to $61,500: A Rough Start to August
Disappointing employment figures in the United States shook Wall Street on Friday, triggering a chain reaction in the financial markets. This data significantly affected the values of crypto assets, notably bitcoin.
Revelations of a worrying employment report
The latest U.S. employment report, released on Friday, unveiled alarming figures that immediately shook the stock markets. The Department of Labor report revealed that the unemployment rate increased to 4.3% in July, its highest level since October 2021.
Although 179,000 jobs were created in June, the July figures show a growth of only 114,000 non-farm jobs. This figure is well below economists’ forecasts, which estimated an addition of 175,000 jobs. This situation fuels fears of an imminent recession, especially with the highest interest rates in 22 years making borrowing more expensive.
Analysts are divided on the long-term implications of this data. Some, like Zach Pandl of Grayscale, wonder if the economy is undergoing a soft landing or if the recession has merely been delayed. This uncertainty makes the markets particularly nervous, in a context where the U.S. Federal Reserve could review its interest rates next month.
Cascade effects on bitcoin and other crypto assets
The immediate market response was a sharp drop. The Nasdaq experienced a 2.9% decline, slipping into a market correction after losing 10% from its peak last month. Similarly, the S&P 500 and the Dow Jones recorded drops of more than 2%, marking one of the worst trading sessions since 2022.
Panic in traditional markets quickly affected the crypto market. Bitcoin notably fell by 4.4% in a few hours to about $62,500. Currently, the crypto asset is trading below the $61,500 mark. Altcoins like Ether and Solana also suffered significant losses, dropping nearly 3% and more than 4%, respectively.
Publicly traded companies in the cryptocurrency sector were not spared. MicroStrategy, the largest corporate holder of bitcoin, saw its stock drop by 3% to $1,460. Similarly, Coinbase, one of the world’s leading crypto exchanges, saw its stock price decrease by 2.8% to $208.
In conclusion, the economic and financial news of this Friday underscores the fragility of the markets in the face of negative economic indicators. Cryptocurrencies and tech stocks have shown their vulnerability, while experts debate the possibility of a recession. Investors remain on alert, closely monitoring the Federal Reserve’s upcoming decisions and the evolution of economic indicators.
