July’s nonfarm payrolls grew by a mere 73,000, far below expectations, with private sector hiring at 83,000 and public sector jobs declining. Revisions slashed prior months’ gains by over 258,000, while job cuts hit 292,294—the highest since 2020. Over 160,000 federal workers on administrative leave due to D.O.G.E. budget cuts will likely worsen future stats, signaling deeper economic trouble.
This dismal data has sparked calls for Federal Reserve rate cuts, with President Trump pressuring Chair Jerome Powell for action. Lower rates could boost risk-on assets like crypto by reducing the cost of capital and fueling speculative investment.
A weakening US dollar, driven by economic slowdown, could further accelerate capital flows into crypto. A softer dollar makes tokens like Bitcoin cheaper for global investors, while institutions may see crypto as a hedge against prolonged monetary easing.
However, short-term market reactions remain muted, with Bitcoin and Ethereum dipping slightly amid uncertainty. Traders await clearer Fed signals, keeping volatility high.
While immediate upside is capped, the long-term outlook is bullish.
Lower rates and a weaker dollar could position crypto as a prime beneficiary of economic weakness. Traders should monitor Fed moves and macro trends closely, as crypto’s next rally may hinge on these evolving dynamics.
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