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12 January, 2025

US Jobs Report Shakes Bitcoin’s Future: What Does It Mean for 2025?

12 January, 2025

Bitcoin (BTC) continues to captivate investors, and the latest jobs report from the US Bureau of Labor Statistics (BLS) has sent ripples through the crypto market. While overall sentiment remains positive, recent economic developments raise questions about Bitcoin’s trajectory in 2025. Currently trading above $94,000, Bitcoin has experienced a volatile week, showing a 3.45% loss over the past seven days. This follows a December employment report revealing a surge of 256,000 nonfarm payrolls—100,000 more than anticipated. The Kobeissi Letter, a prominent capital market analysis firm, analyzed this data. Their analysis highlights a robust six-month job growth average of 165,000 since July 2024, the highest since July of the same year. This presents a challenge to the Federal Reserve’s (Fed) strategy. The Fed initiated interest rate cuts in September 2024, citing slowing job growth and inflation. However, the Kobeissi Letter argues that the recent strong jobs data suggests the Fed’s approach may have been premature. The unexpected strength in the labor market now necessitates a reconsideration of the rate cut trajectory. The Fed might pause rate cuts or even consider rate hikes to combat potential inflationary pressures. This shift is significant for Bitcoin. Lower interest rates generally favor riskier assets like cryptocurrencies. The possibility of no further rate cuts, or even rate hikes, could negatively impact Bitcoin’s price. In fact, Bitcoin experienced a significant dip of over 9% mid-December following earlier indications of potential rate cut reductions in 2025, as investors adjusted their positions across markets. The Kobeissi Letter estimates a 44% probability of no rate cuts through June 2025.

Bitcoin Price Analysis

At the time of writing, Bitcoin is trading at $94,028, showing a slight 0.22% increase in the last 24 hours. However, it remains down 3.72% over the past seven days and 6.35% over the past 30 days. Despite these headwinds, Bitcoin investors maintain bullish expectations, citing factors like historical bull market performance, anticipation of pro-crypto US government policies, and ongoing institutional investment through spot ETFs. With a market capitalization exceeding $1.84 trillion, Bitcoin solidifies its position as the leading cryptocurrency and one of the world’s eight largest assets. The implications of the recent jobs report on Bitcoin’s performance in 2025 remain to be seen, and the crypto market will be closely watching the Fed’s next moves.