Cryptocurrencies and stocks remained on edge after the U.S. released weak nonfarm payroll data, pointing to a potentially dovish Federal Reserve.

Bitcoin (BTC) pulled back from around $72,500 to the $70,000 level while Ethereum (ETH) is now down more than 3% over the past 24 hours to $2,500. The total market cap of all coins dropped to $2.45 trillion, while the crypto fear and greed index moved from the greed zone of 65 to 57.

American stock index futures responded positively, with the Dow Jones, S&P 500, and Nasdaq 100 indices gaining 230, 33, and 130 points, respectively.

According to the Bureau of Labor Statistics, the United States economy added only 12,000 jobs in October, a significant drop from the 223,000 added in September. This figure was much lower than the median estimate of 106,000 and the ADP private sector payrolls of 115,000.

The bureau attributed the low job additions to recent hurricanes in the U.S. and strikes at major employers like Boeing. Manufacturing payrolls dropped by 46,000, while government payrolls rose by 40,000.

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On a positive note, the unemployment rate remained unchanged at 4.1%, and wage growth stayed strong. Average hourly earnings rose by 0.4% month-on-month and 4.0% annually.

Why the NFP data matters to Bitcoin and other cryptocurrencies

In theory, this data could be positive for Bitcoin, altcoins, and the stock market for two reasons. First, the release came shortly before the American election, potentially influencing voters in favor of Donald Trump.

Trump has expressed support for the crypto industry and suggested appointing a sector-friendly figure to head the Securities and Exchange Commission. Under current chair Gary Gensler, the SEC has faced criticism for regulating through enforcement. Recently, the agency issued a Well’s Notice to Immutable X (IMX), a gaming-focused layer-2 network.

The weak nonfarm payroll data may also encourage the Federal Reserve to continue cutting interest rates more aggressively as inflation trends toward 2%, reflected in the decline in U.S. bond yields following the report.

The Fed has begun reducing rates, and analysts expect this trend to persist. The CME FedWatch tool indicates that the market anticipates rates will end 2025 at 3.50%, down from the current 5.0%.

Riskier assets like Bitcoin and stocks tend to perform well when the Fed lowers interest rates, as some capital shifts from money market funds to riskier assets, a trend reflected in recent Bitcoin ETF inflows.

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