Bitcoin slid Friday after a better-than-expected labor report showed that the U.S. job market accelerated in August.
The leading cryptocurrency was recently trading for close to $79,764 after dropping as low as $78,706 earlier in the morning in New York. It’s currently down over 1% over a 24-hour period. On Thursday, the coin soared above $82,000.
The Federal Reserve is typically more likely to raise interest rates when the labor market is strong, because more people employed means more spending, and more spending can push inflation up.
Federal Reserve Chair Kevin Warsh last week gave his first major speech as head of the U.S. central bank and said he had “more work to do” to fight inflation. Bitcoin has typically done well in a low-interest rate environment.
Traders currently view a U.S. Federal Reserve interest rate hike at the upcoming September 15–16 policy meeting as roughly a 50% to 60% probability.
But U.S. President Donald Trump on Friday demanded the Federal Reserve slash interest rates.
Writing on his social media platform Truth Social, Trump said: “Lower the interest rates because the U.S.A. is a much stronger credit than it was just a short time ago!”
He added: “We should have the LOWEST RATE of any country in the World, like ‘the old days.’”
Bitcoin has decoupled from stocks recently as investors have renewed concerns around dollar debasement.
The cryptocurrency started surging last month, after the U.S. Treasury Department said it would more than double the size of its government debt repurchases. The coin had its best run in three years and third best August ever.
The much-talked about debasement trade is back in the spotlight, and bitcoin has been trading in lockstep with gold, according to analysts. The so-called debasement trade is when investors buy an asset as a way to hedge against a currency losing value.
News dropped last month that U.S. public debt exceeded $40 trillion for the first time too. Excessive debt also undermines confidence in the dollar, making assets like bitcoin and gold attractive.