Key highlights:
- Nonfarm payroll additions in the US hit 162,000 for August, coming in nearly triple the 56,000 predicted by expert consensus.
- Following the release of these figures, Bitcoin experienced a sell-off from $81,300 down to local troughs of $78,600 before climbing back to $79,500.
- An alternative Bitcoin fork utilizing the Blake2b algorithm recorded its maiden trading activity, with units exchanging hands at $350 on the Neoxa exchange.
Labor market outpaces forecasts by three times
Based on figures published on Friday, the American economy incorporated 162,000 nonfarm payroll positions in August, vastly exceeding analyst consensus projections of roughly 56,000 positions. Following this announcement, Bitcoin (BTC) dropped from $81,300 to a local low of $78,600. At the time of writing, it trades at $79,500.
Current macroeconomic statistics hold heightened significance because interest rate outlooks remain deeply divided heading into the upcoming Federal Open Market Committee (FOMC) gathering scheduled for September 15-16. Under previous Federal Reserve leaders, expectations preceding FOMC events typically remained well-anchored. Yet, the absence of forward signals from Chair Kevin Warsh, combined with potential dissenting votes within the committee, has amplified uncertainty.
After Fed Governor Christopher Waller stated on Thursday that he would support a rate pause pending incoming inflation metrics, Polymarket odds shifted to a 60% chance for a pause and a 40% chance for a 25 basis-point rate increase. Nevertheless, Friday’s employment statistics shifted the estimated odds back to an even 50/50 division.
Implied Probabilities for the Sep. 16 FOMC rate decision. Source: Polymarket
Reacting to the robust labor metrics, US President Donald Trump issued fresh demands for rate reductions. “The Fed Board, with its great new leader, must get smart – BE PATRIOTS for a change,” he wrote in a Truth Social message, adding: “High interest rates put the U.S.A. at a very unfair disadvantage, and I won’t allow that to happen!”
Trump had regularly criticized former Chair Jerome Powell for declining to lower rates, though he had refrained from directing similar remarks toward Warsh prior to Friday.
Blake2b iteration of Bitcoin secures initial liquidity
When the BIP-110 soft fork went live on August 7, the Bitcoin network temporarily divided into two competing blockchains: one enforcing the updated rules of BIP-110 and another proceeding under legacy rules. The BIP-110 branch largely stalled because miners failed to allocate adequate computing power to sustain that chain.
Backers of BIP-110 regarded the refusal of miners to adopt the user-activated soft fork (UASF) as proof that Bitcoin’s mining tier has grown overly centralized. That criticism was intensified by the lack of any organized pushback from the Bitcoin Core faction, such as a user-rejected soft fork (URSF). Merely five mining pools govern the vast majority of Bitcoin’s hashrate, concentrating immense control over which chain advances and which transactions make it into blocks.
Bitcoin Network Hashrate Distribution. Source: Blockchain.com
Consequently, a faction of BIP-110 supporters, spearheaded by LukeDashjr, opted to maintain the BIP-110 chain by modifying the proof-of-work mechanism to Blake2b, thereby enabling a fresh, more decentralized cohort of miners to emerge via DATUM gateway infrastructure. The associated hard fork commenced on August 30. Every address possessing SHA-256 Bitcoin prior to August 7 (and potentially afterward) maintains an equivalent balance on the Blake2b variant of Bitcoin. To date, the sole platform listing Blake2b Bitcoin is Neoxa. Although market depth is thin, Blake2b tokens currently trade at $350 against USDC with a 1.1% spread.
BTCB2/USDC orderbook. Source: Neoxa Exchange
Related: Crypto Biz: AI took a back seat when Bitcoin started climbing
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Originally published at https://cointelegraph.com/markets/surprise-labor-market-print-sends-bitcoin-back-below-80k?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound.
