Bitcoin and other high-risk assets might find advantages in a faltering job market and rising unemployment in the United States, the world’s largest economy.
The U.S. unemployment rate rose unexpectedly to 4.1%, surpassing the anticipated 4.0%, marking its highest level since December 2021. In June, the U.S. economy added 206,000 jobs, exceeding expectations of 191,000 but significantly fewer than the revised 218,000 jobs added in May, originally reported as 272,000, according to data from the Bureau of Labor Statistics released on July 5.
A deteriorating labor market in the U.S. could potentially boost Bitcoin’s price, as suggested by Jag Kooner, Bitfinex’s derivatives head, in comments to Cointelegraph.
Bitcoin has been stuck in a downtrend for more than a month, dropping below the critical $60,000 threshold.
Despite concerns among some traders that the bullish cycle may have ended, analysts such as the widely followed Rekt Capital view the current correction as consistent with historical patterns of Bitcoin corrections, as stated in a July 4 post.
Institutional inflows into U.S. Bitcoin exchange-traded funds (ETFs) have also been sluggish, with three consecutive weeks of net negative inflows totaling over $315 million so far this week, based on data from Dune.
Kooner suggests that Bitcoin ETF flows could see an upturn if the weakening labor market fuels expectations of a potential interest rate cut, although he also points out a recent absence of inflows and “dip-buying” purchases.