Crypto Follows Equities: Bitcoin and Major Tokens Move in Sync with Stocks
Bitcoin and other major digital assets are increasingly tracking the performance of equities as they head into the pivotal U.S. jobs report due later on Friday. A 30-day correlation between a gauge of the largest 100 digital assets and MSCI’s index of world shares is near 0.60, highlighting one of the strongest alignments in the past two years. This rising correlation suggests that crypto markets are closely following stock market sentiment.
Market Caution: Uncertainty Looms Ahead of Key Economic Data
Investors are on edge as they await the U.S. employment data, which could signal whether the economy is slowing and influence the Federal Reserve’s stance on interest rate cuts. A weaker-than-expected jobs report last month triggered volatility across global markets, including a sharp downturn in crypto. With the Federal Reserve closely monitoring labor market conditions, today’s data could either bolster or temper expectations for rate cuts, which are generally viewed as positive for speculative assets like cryptocurrencies.
Bitcoin and Other Tokens Edging Up: Slight Gains Ahead of Jobs Data
Bitcoin edged up about 1% to $56,653 as of midday Friday in Singapore, still well below its all-time high of over $73,000 set in March. Other cryptocurrencies, including Ether and Solana, also posted modest gains. U.S. equity futures, meanwhile, wavered, reflecting market caution as investors brace for the August payrolls data.
ETF Trends: Bitcoin ETFs See Inflows Turn to Outflows
Earlier this year, inflows into U.S. spot-Bitcoin exchange-traded funds (ETFs) helped drive a record rally in the largest digital asset. However, the momentum has since stalled, and ETFs have experienced outflows in recent days, reflecting a cooling of investor enthusiasm amid market uncertainties.
Fed Watch: Jobs Data Could Sway Expectations for Rate Cuts
Cici Lu McCalman, founder of blockchain adviser Venn Link Partners, noted that the upcoming jobs report will be closely scrutinized for clues on the Fed’s next move. A strong report could dampen bets on imminent rate cuts, posing a risk for speculative assets like crypto. Looser monetary policy tends to be favorable for riskier investments, and forecasters are predicting that the jobs figures will show some stabilization in hiring and a slight decrease in the unemployment rate, helping to calm growth concerns that spooked markets in July.
