Bitcoin (BTC) remains in the spotlight and concerns of investors, especially after latest data on non-agricultural employment from the US Bureau of Labor Statistics (BLS). While overall market sentiment remains bullish, recent events in the US economy indicate that macroeconomic factors may work against the leading cryptocurrency in 2025.
Bitcoin is currently trading above $94,000 after another tumultuous price performance that saw it lose 3.45% over the last seven days.
The Fed’s decision to cut interest rates is dead, analysts say
In Post X On December 10, market experts from global capital markets analysis firm The Kobeissi Letter analyzed a summary of the employment situation for December 2024. According to the BLS, nonfarm payroll employment increased by 256,000 jobs this month, representing an additional 100,000 jobs in compared to commonly expected numbers.
Following this report, The Kobeissi Letter analysts highlight that the U.S. economy has added an average of 165,000 jobs since July, representing the highest six-month average since July 2024.
Given that the US Federal Reserve began implementing interest rate cuts from September 2024, citing at the time a reduction in job growth and inflation, analysts at The Kobeissi Letter said Apex Bank’s approach may have been misguided in airy of recent events.
As such, the Fed is expected to halt interest rate cuts to combat expected elevated inflation due to forceful jobs data, with the potential for even rate hikes.
Generally speaking, not cutting rates or implementing rate increases is bad for Bitcoin because lower interest rates provide investors with the opportunity to trade risky assets such as cryptocurrencies. Following the Fed’s earlier announcement of potential interest rate cuts in 2025, Bitcoin experienced a pointed crash of over 9% in mid-December as investors began to exit their volatile positions across financial markets.
The Kobeissi Letter now projects that the Fed’s turn towards lower interest rates is likely over, with a 44% probability of no rate cuts by June 2025.
Bitcoin price overview
At the time of writing, Bitcoin is trading at $94,028, reflecting an enhance of 0.22% in the last 24 hours. Meanwhile, the main cryptocurrency is down 3.72% and 6.35% over the past seven and thirty days, respectively.
Despite the potential for subdued interest rate cuts in 2025, Bitcoin investors are likely to maintain bullish sentiment due to other factors, including historical bull cycle price performance, an expected pro-crypto US government, and continued institutional investment via spot ETFs.
With a market capitalization of $1.84 trillion, Bitcoin is still the largest cryptocurrency and the eighth largest asset in the world.
Featured image from Investopedia, chart from Tradingview