Index
ToggleA record correction in US jobs data has set the stage for the Federal Reserve to cut interest rates, a move that could give Bitcoin a major boost.
Highlights:
- The US Department of Labor revised down 911,000 jobs, the largest cut in history, showing a seriously weakened labor market.
- The move reinforces expectations that the Fed will soon cut interest rates, even though inflation remains high.
- Bitcoin could repeat the bullish scenario of gold, regaining momentum and heading towards new highs in the fourth quarter.
Bitcoin is likely to benefit in the coming weeks, as the US Department of Labor releases a record revision, removing 911,000 jobs from previously reported data for the 12-month period ending in March 2025. On Medium, monthly employment figures have been overstated by about 76,000 jobs, even larger than the revision in 2009 – at the height of the global financial crisis.
The decline was concentrated in consumption-dependent industries, including -176,000 jobs in Leisure & Hospitality and -226,000 jobs in Trade, Transportation and Utilities, according to the Kobeissi bulletin. The previously reported total private employment was inflated by 880,000 jobs – a level of weakness not seen outside of the Great Depression and the COVID-19 pandemic of 2020.
The revisions continue a worrying trend. Last month, the US cut 258,000 jobs from the May and June reports. Yesterday’s revision subtracted another 27,000 jobs, marking the largest two-month net revision in modern history outside of 2020. Combined with a weak gain of just 22,000 jobs in August, the data all but cements the case for a rate cut by the Fed next week.
Gold Has Reflected Expectations – Bitcoin Could Be Next
Gold, the traditional store of value, has gained 40% this year, while gold mining stocks have nearly doubled, outperforming the S&P 500 Index by nearly 10 times. Investors have long bet that a weakening labor market will force the Fed to act, despite core CPI returning above 3% and economic growth remaining close to 3%.
For Bitcoin, the impact could be even more dramatic. Bitwise strategist André Dragosch summed it up in a post on X: “The Fed hasn’t even cut rates yet and people are still ignoring the #Bitcoin vs. Money Supply chart. Major USD stablecoins are sending the same signal: macro liquidation is expanding. This is bullish for Bitcoin.”
Bitcoin benefits from liquidation expansion cycle
With the Federal Reserve expected to cut interest rates by 25 basis points in the next eight days, it would be the first rate cut in history to come while inflation remains high, stocks are hitting new highs, and GDP remains strong. The combination suggests one thing: The Fed is prioritizing labor market weakness over inflation, creating a “cautious but easy” stance.
The upside for Bitcoin is clear. Just as gold has been rallying for months ahead of official policy confirmation, Bitcoin, with its lightweight position and high sensitivity to historical liquidation cycles, could turn this rare policy environment into a strong bullish catalyst, resuming momentum toward new highs in Q4.
Analytics platform Tephra Digital previously predicted: “If the lagging correlation between Bitcoin, M2 and gold continues to hold, the rest of this year could be very interesting. The charts below show a price range of $167,000 – $185,000.”
The analysis, data and information in the article are for informational and reference purposes only and should not be XEM investment advice. The cryptocurrency market always has high volatility and high risks, investors need to consider carefully before making a decision.
