The US unemployment rate has jumped to a 4-year high of 4.3%, with non-farm payrolls growing by only 22,000 jobs in August, far below expectations. This signals a softening economy, and the Federal Reserve is likely to pivot to rate cuts to prevent a deeper slowdown ¹.
*Market Implications:*
- *Crypto:* Historically the strongest performer in easing cycles, crypto reacts fastest and strongest to liquidity shifts. Lower rates reduce the opportunity cost of holding crypto versus bonds or cash.
- *Equities:* Supportive, but with slower upside. Equities usually rise once cuts begin, but gains are gradual and uneven.
- *Bonds:* Prices rise, yields fall. Bonds rally at first, but falling yields limit their long-term appeal.
*Why This Matters for Crypto:*
- *Liquidity:* Crypto values are tied to liquidity and adoption. With global M2 supply hitting new highs and the Fed about to cut, liquidity is expanding again.
- *Institutional Flows:* ETFs and corporate treasuries are creating a more stable base of buyers, strengthening the long-term floor.
*What to Expect:*
- *Q4 2025:* Macro liquidity cycles typically move in 3-4 year phases. With the Fed cutting rates, crypto could see a significant bull run.
- *Rate Cuts:* Futures markets price in a 100% probability of a September cut, with an 88% chance of a 25 bps cut and a 12% chance of a 50 bps cut ¹.
*Takeaway:*
Weak jobs data may look negative for the economy, but it's a bullish signal for crypto. With more liquidity coming, this environment is one of the most bullish backdrops crypto has seen since 2020.
*Hashtags:* #CryptoMarketAlert #RateCutExpectations #FedWatch #LiquidityMatters #BullRunAhead