AI Tokens Lead Crypto Rebound Amid Strong U.S. Economy

Perhaps helping the move was a much stronger-than-anticipated U.S. labor market report, which added 251,000 jobs in September, blowing past estimates for 140,000. The unemployment rate decreased to 4.1%, quieting concerns of an imminent recession.

The positive sentiment rippled through the stock market as well, with the S&P 500 and Nasdaq indexes closing the day 0.9% and 1.2% higher, respecitvely. The U.S. 10-year Treasury bond yield jumped 13 basis points to just shy of 4%, while the U.S. dollar index rose to its strongest level since mid-August. Following the report, investors now overwhelmingly expect a smaller 25 basis point interest cut from the Federal Reserve in November.

“Bitcoin and the longer tail of crypto assets are sensitive to labor market data because it influences the Fed’s decision on rate cuts, which in turn have a positive impact on BTC as borrowing costs fall,” Leena ElDeeb, said research analyst at digital asset manager 21Shares. “We expect flows to start recovering following the escalation of geopolitical tensions that shook the market over the past week.”