The recent downturn in the U.S. job market has sparked optimism in the cryptocurrency sector, driven by expectations of a significant easing by the Federal Reserve. As bond yields lower and the Dollar weakens, market sentiment has considerably improved. Data released by the U.S. Bureau of Labor Statistics indicates a mere 22,000 additions to non-farm payrolls in August, a stark contrast to the 79,000 jobs added in July and 14,000 in June. Moreover, the unemployment rate climbed to 4.3 percent from 4.2 percent in July, aligning with forecasts.
According to the CME FedWatch tool, which gauges interest rate trader expectations, there’s an 88 percent chance of a 25-basis point rate cut by the Fed in September, with a 12 percent probability for a more aggressive 50-basis point cut. Easing bond yields have been observed across various regions, with ten-year sovereign bond yields dropping more than 2 percent in countries like the U.S., Canada, Germany, Spain, and Italy. Such a decline diminishes the opportunity cost of holding non-interest-bearing cryptocurrencies, making them more attractive to investors.
Further enhancing this sentiment, the Dollar has weakened, with the six-currency Dollar Index dropping 0.67 percent overnight to 97.68. The index has fluctuated between 97.52 and 98.17 over the past 24 hours. This rally in the crypto market coincides with gold reaching an all-time high of $3,644.62 per troy ounce, although it has slightly retreated to $3,635.82.
Overall, the cryptocurrency market capitalization gained 1.7 percent overnight, now totaling approximately $3.87 trillion. Notably, more than 65 of the top 100 cryptocurrencies experienced gains exceeding one percent overnight, while only five faced losses of more than one percent. The meme category cryptocurrencies saw a market capitalization surge of 2.8 percent, while those associated with AI and Big Data rose by 2.4 percent. Additionally, cryptocurrencies designated for the U.S. Strategic Crypto Reserve and “Made in America” cryptocurrencies recorded respective overnight gains of 2.3 percent and 1.7 percent.
Bitcoin, currently trading at $113,117.69, has increased by 2.3 percent overnight. It has moved within a range of $113,357 to $109,347 in the last 24 hours, although it remains roughly 9 percent below its all-time high of $124,457.12 from August 14. Ethereum also experienced an uptick, rallying 1.9 percent to trade at $4,461.18, approximately 10 percent below its all-time peak. Its trading range fluctuated between $4,484 and $4,269.
In the ETF market, Bitcoin-based Spot products in the U.S. saw outflows of $223 million on Thursday after inflows of $301 million the previous day. Similarly, Ethereum-based Spot ETFs recorded net outflows of $167 million on Thursday, compared to net outflows of $38 million on Wednesday. XRP, ranked third, rose by 1.4 percent to trade at $2.87, yet remains about 25 percent lower than its all-time high. BNB, ranked fifth, gained 1 percent to reach $856.67, while Solana’s price rose to $209.45, marking an increase of over 1 percent. Dogecoin, in the eighth position, added 1.9 percent and currently trades at $0.2204. TRON, ranking ninth, edged up 0.09 percent, now trading at $0.3386, and tenth-ranked Cardano surged by 3.4 percent to $0.8436.
Among lesser-known cryptocurrencies, MemeCore (M) topped the gains within the top 100, skyrocketing over 23 percent, while World Liberty Financial (WLFI) followed closely with gains exceeding 12 percent. In contrast, Aave (AAVE), ranked 28th, recorded a decline of 3.5 percent overnight.
