Bitcoin declined on Friday as a stronger-than-anticipated U.S. employment report signaled continued momentum in the labor market. The digital asset dropped to an intraday low of $78,706 during New York trading before partially recovering to approximately $79,764, marking a decline of over 1% within 24 hours. This downturn followed Thursday’s surge above $82,000, highlighting bitcoin’s ongoing volatility.
A robust employment landscape typically increases the likelihood of Federal Reserve interest rate hikes, as higher employment drives consumer spending and potentially accelerates inflation. Federal Reserve Chair Kevin Warsh recently emphasized during his inaugural major address as central bank head that additional measures may be necessary to combat inflationary pressures.
Market participants are currently assessing the probability of a Federal Reserve rate increase at the upcoming September 15–16 policy meeting, with estimates ranging between 50% and 60%. Meanwhile, U.S. President Donald Trump reiterated his position on social media platform Truth Social, urging the Federal Reserve to reduce interest rates, arguing that the United States maintains stronger creditworthiness compared to earlier periods.
In recent weeks, bitcoin has shown increasing independence from traditional stock markets amid renewed concerns regarding potential dollar devaluation. The cryptocurrency experienced a significant rally last month following announcements from the U.S. Treasury Department about expanding government debt repurchase programs, marking its strongest performance in three years and one of its best August periods historically.
Analysts note that the so-called “debasement trade”—where investors seek alternative assets as hedges against currency depreciation—has returned to prominence. Bitcoin has been moving in tandem with gold, reinforcing its appeal as a store of value during periods of economic uncertainty. With U.S. public debt surpassing $40 trillion for the first time, concerns over excessive national debt continue to undermine confidence in the U.S. dollar, further supporting demand for alternative assets like bitcoin and precious metals.