Bitcoin and other major digital assets are likely to follow the stock market’s lead in response to a crucial US jobs report due later on Friday, as a growing short-term correlation between cryptocurrencies and equities suggests.
According to Bloomberg data, the 30-day correlation coefficient between the top 100 digital assets and the MSCI world stock index is approaching 0.60, one of the highest levels in the past two years.
A coefficient of 1 indicates assets move in tandem, while -1 suggests an inverse relationship.
Investors are anxiously awaiting the employment data amid uncertainty about a potential economic slowdown in the US and the subsequent pace of Federal Reserve interest rate cuts.
A weaker-than-expected jobs report last month triggered global market volatility, including a drop in cryptocurrencies.
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“Bitcoin has been responding to macro events in a highly correlated way to equities,” noted Benjamin Celermajer, co-chief investment officer at Magnet Capital. He added that sentiment has been “pretty poor” over the past two weeks, with US$55,000 being a critical support level for Bitcoin.
Bitcoin was up about 1% to US$56,653 as of 12:30 p.m. Friday in Singapore, trading roughly US$17,000 below its all-time high set in March. Smaller tokens like Ether and Solana also saw slight gains, while US equity futures fluctuated, indicating caution ahead of the August payroll data.
Earlier this year, inflows into US spot-Bitcoin exchange-traded funds fueled a record-breaking rally in Bitcoin. However, the bull run lost momentum, and the ETFs have experienced outflows in recent days.
“The devil will be in the detail for the jobs report tonight,” said Cici Lu McCalman, founder of blockchain advisory firm Venn Link Partners. She warned that one risk is the data being strong enough to curb expectations of Fed rate cuts.
Easier monetary policy is generally considered beneficial for speculative assets like cryptocurrencies. Forecasters expect the jobs report to show a rebound in hiring and a slight decrease in the unemployment rate, signaling stabilization after July’s data sparked economic concerns.
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