In the last 24 hours, Bitcoin’s price soared to $116,800, remaining near its peak while being analyzed. The US government shutdown news proved beneficial for cryptocurrencies, leading to price surges among altcoins as well. Moreover, the recent ADP data, released approximately an hour ago, heightened the motivation for a potential interest rate cut ahead of Friday’s employment numbers, though these could be delayed due to the shutdown.
ADP Data Released
The US ADP employment change figures surprised markets by falling significantly below expectations. While the previous month’s report was 54,000, it was anticipated at 50,500 this time. However, the reported -32,000 was unexpected. As a result, the US dollar dropped from 97.8 to 97.48, sparking renewed cryptocurrency optimism on the growing anticipation of an interest rate cut in October.
According to the ADP report, most sectors are not generating new employment opportunities. Dr. Nela Richardson, ADP Chief Economist, noted that despite the strong economic growth observed in the second quarter, the current data reaffirmed the cautious hiring approach of American employers in the labor market. This data challenges the assertions by Federal Reserve members that employment is recovering—a stance appearing increasingly doubtful.
Impacts on Cryptocurrencies
If the data indicates continued interest rate cuts, cryptocurrencies could see a bullish trend. The ADP data benefits cryptocurrencies in two ways. Firstly, it confirms the contraction trend in employment. Secondly, it acts as a precursor to the non-farm payroll data coming on Friday, which often moves in parallel and thus raises expectations that it may also fall short of forecasts.
Therefore, as the probability of interest rate cuts rises, cryptocurrencies might experience further gains. The PCE data confirmed that inflation increases are limited and that tariffs have not led to as much employment as feared. Employment figures further confirmed the contraction. When combining these, the perspectives of Fed members Miran, Bowman, and Waller were validated, increasing the prospect of seeing an additional 50 basis-point cut annually.
Nonetheless, upcoming inflation and employment figures will likely force the Fed to make meeting-by-meeting decisions for a while longer. The real supportive event for crypto would be the expected approvals for spot altcoin ETFs in the coming days. In such an environment, positive news from the SEC could accelerate cryptocurrency growth further.