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Bitcoin experienced a slight increase on Friday, displaying resilience despite an unexpectedly robust jobs report and a week filled with turmoil surrounding the U.S. debt ceiling negotiations and renewed worries about inflation.
The top cryptocurrency in terms of market capitalization was trading around $27,180, reflecting a 1.2% increase. BTC managed to surpass the $27,000 mark just before the opening of U.S. equity markets on Friday. This move came after spending a significant portion of the previous two days below this level, primarily due to concerns about inflation that have impacted prices over the past 18 months.
“Bitcoin is holding steady after a busy week filled with a debt limit deal, a complicated jobs report that showed both robust hiring and surging layoffs, and as lawmakers inch towards figuring out how to regulate crypto,” Edward Moya, senior market analyst at foreign exchange market maker Oanda, wrote in an email, flagging recent discussion of a Securities Clarity Act that could clarify “if some tokens are unregistered securities.”
Ether has recently been traded at slightly above $1,905, reflecting a nearly 2% increase from the previous Thursday. Throughout the last week, the second largest cryptocurrency had remained below this threshold as ETH investors grappled with challenges stemming from macroeconomic factors.
With few exceptions, the majority of prominent cryptocurrencies experienced a day of positive performance. Tokens associated with the Cardano and Solana smart contract platforms, ADA and SOL, respectively, witnessed notable gains of over 4% and 3.5%. Meanwhile, according to the CoinDesk Market Index, which measures the overall performance of crypto markets, several small DeFi-focused protocols saw substantial increases over the past seven days. Lido (LDO), Synapse (SYN), and PancakeSwap (CAKE) climbed by 15%, 13%, and 12% respectively. The CMI recently rose by 1.6%.
Stocks surged in response to the impressive report from the U.S. Labor Department, revealing a staggering addition of 339,000 jobs in May. This figure exceeded economists' expectations by about 75% and demonstrated a significant increase from the 294,000 jobs added in April. The strong employment data served as the most recent confirmation that the job market remained highly competitive, indicating that the economy was still expanding and thereby maintaining concerns about inflation. However, there was a glimmer of hope in the form of the May unemployment rate, which stood at 3.7%, slightly higher than the anticipated 3.5%. This unexpected statistic may provide justification for the U.S. central bank to consider halting its series of interest rate hikes. The continuous increase in interest rates has posed challenges for cryptocurrency markets.
The Nasdaq Composite and S&P 500, both of which have a significant focus on technology stocks, experienced substantial gains, with the Nasdaq Composite surging by 1.4% and the S&P 500 increasing by 1%. In contrast, the price of safe-haven gold, which had approached a record high just under a month ago, declined by 1.5% and is currently trading at $1,965.
Oanda's Moya suggests that the U.S. central bank is currently grappling with a complex decision regarding an interest rate increase in June. With indications of a possible pause, the central bank is closely monitoring the forthcoming releases of the Institute for Supply Management (ISM) and the May Consumer Price Index. These upcoming economic indicators are likely to influence the central bank's final decision.
“The Fed has almost locked themselves into a corner with a skip for the June meeting, but it should be very clear that they are not done raising rates,” Moya wrote, also noting that “that at the midpoint of the year, “this economy is not showing strong signs that the second half of the year recession is coming.”
