Many people do not understand how non-farm data affects Bitcoin. Is this non-farm data good or bad? Here is a simple explanation from Xiaoliuli:
The downward revision of the U.S. non-farm data for March and April reflects a weak job market and potential sluggish economic growth, which is favorable for Bitcoin.
Economic and risk appetite transmission: The downward adjustment of employment data shows that the U.S. economy is not as strong as initially perceived. When expectations about the economy are hit, market confidence in the dollar can easily decline.
Bitcoin is highly volatile, but some investors consider it an asset to cope with uncertainties in traditional finance.
When the economy is not doing well, Bitcoin's characteristics as 'digital gold' that can hedge against risks draw people's attention, leading to a flow of funds into Bitcoin, which drives the price up.
Impact of monetary policy expectations: If the employment data is poor, the market may believe that the Federal Reserve will adopt a more accommodative monetary policy to stimulate the economy in the future, such as lowering interest rates.
When the Federal Reserve implements accommodative policies, the money supply in the market increases, and the liquidity environment becomes more relaxed. This relaxed environment is beneficial for high-risk assets.
Bitcoin is a high-risk speculative asset. When expectations for more money in the market improve, Bitcoin's price can be supported.
However, the cryptocurrency market is influenced by multiple factors, including geopolitical issues, regulatory policies, and the words of influential figures, which can also affect Bitcoin's price. Non-farm data is only an important reference and does not have a direct impact on Bitcoin, as Bitcoin mainly relies on consensus.
