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Seeking Alpha 2023-02-03 17:56:49

Bitcoin stumbles after U.S. jobs growth unexpectedly surges

Bitcoin ( BTC-USD ) pared some of this week's gains in Friday afternoon trading after the U.S. government reported blockbuster jobs growth for January that blew away expectations, in a sign that the Federal Reserve will likely keep interest rates higher for longer with labor market imbalances persisting. The digital token edged down 1.4% to $23.60K as of shortly before 1:00 p.m. ET, after falling as much as 2.6% about an hour after the nonfarm payrolls report. Still, BTC is on track to record a 1.5% increase for the week ending Feb. 3, partly buoyed by Fed chief Jerome Powell's comments on Wednesday about the U.S. central bank's progress on lowering inflation. Similarly, ethereum ( ETH-USD ), the world's largest altcoin by market cap, slipped 0.7% to $1.66K, though poised to close out the week higher by 4.3%. Overall, the global crypto market cap decreased 0.6% to $1.09T at the time of writing, according to CoinMarketCap data . The bearish price action among cryptos pulled down a barrage of crypto-related stocks, led by Soluna Holdings ( SLNH ) -9.2% , Marathon Digital ( MARA ) -7.1% , Iris Energy ( IREN ) -6.2% , Argo Blockchain ( ARBK ) -5.7% and HIVE Blockchain Technologies ( HIVE ) -5.3% . The broader stock market was mixed, with the Dow Jones eking out a 0.1% gain and the S&P 500 and Nasdaq each slipping 0.3% . Bob Elliott, co-founder and CEO of investment firm Unlimited Funds, noted that January's jobs report was "perfect" for the Fed regarding its full employment goal, but not necessarily for the bond market, which is pricing in rate cuts in the back half of 2023 through December 2024, he wrote in a Twitter post . "At this point it would take an extraordinary collapse for the economy to get to easing that quickly given where it is now," he added. "And if you pencil it out, equities fell a lot less than would be implied by the rates move would suggest just by the change in the discount rate, suggesting the market is appropriately reflecting this as a decent outcome for top line earnings." Earlier, The Wall Street Journal reported that bitcoin's year-to-date ascent has been powered mostly by big-money investors.

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