Bitcoin Drops 3% After Jobs Report Revises 2025 Data, Shifts Fed Outlook

The U.S. Bureau of Labor Statistics (BLS) report at 8:30 a.m. Eastern presented traders with two conflicting timelines. The immediate data for January showed nonfarm payrolls growing by 130,000, with the unemployment rate holding steady at 4.3% and average hourly earnings rising 0.4% to $37.17—a 3.7% annual increase that signaled persistent wage pressure. This snapshot suggested ongoing economic resilience.

However, the same release contained a seismic annual benchmark revision that fundamentally rewrote the recent past. The BLS revised the seasonally adjusted job count for March 2025 lower by 898,000 positions and sharply reduced the net job growth for the entire year of 2025. This revision meant the economy had been carrying significantly fewer jobs than initially reported, forcing market participants to reconcile the strong present headline with a suddenly softer historical trendline.

The market’s reaction was swift and decisive, centered on the implications for Federal Reserve policy. Traders interpreted the firm wage growth and the revised—but still positive—hiring trend as reasons for the Fed to maintain a patient, higher-for-longer stance on interest rates. The mechanism for this repricing was most visible in the bond market.

U.S. Treasury yields climbed immediately after the data release, with the benchmark 10-year yield jumping from approximately 4.15% to around 4.20%. This move signaled the market’s expectation of tighter financial conditions. The most dramatic shift occurred in interest rate futures. According to the CME FedWatch tool, the implied probability of a Federal Reserve rate cut in March plummeted from roughly 22% before the report to just about 6% afterward. This rapid recalibration of monetary policy expectations became the primary channel through which the jobs data impacted risk assets.

Bitcoin, trading near $66,900, fell roughly 3% in direct response to this shift. The cryptocurrency’s decline demonstrated its growing sensitivity to traditional macroeconomic indicators and, more specifically, to the global cost of capital dictated by U.S. monetary policy. The logic is clear in the current environment: stronger data that suggests delayed Federal Reserve easing lifts Treasury yields, and higher yields raise the required return for holding risky assets. Bitcoin, often acting as a leading indicator for risk sentiment, felt this pressure first.

The market had been flirting with record highs amid a complex backdrop of growth confidence and rate caution. The jobs report, particularly the sticky wage figures, amplified the cautionary narrative. When wage growth runs firm, it keeps concerns about persistent inflation alive, leading markets to price in a more patient Fed. A patient Fed translates to tighter financial conditions for a longer period, creating a headwind for speculative assets like Bitcoin.

The report sets up three plausible macroeconomic paths that will dictate Bitcoin’s trajectory. The first is a ‘higher-for-longer’ scenario where steady hiring and firm wage growth persist, inflation cools slowly, and rate cuts are pushed well into the future. This path, signaled by the initial market reaction, would keep yields elevated and challenge sustained Bitcoin rallies.

The second path emerges from the benchmark revisions. If the downward revision to 2025 job growth is the first clue of a broader economic slowdown that manifests in future data, rate cuts could re-enter the forecast more quickly, providing support for Bitcoin as financial conditions ease. A third, middle path involves a choppy soft landing with gradual cooling, which could still be constructive but noisy for crypto markets.

The immediate focus now shifts to upcoming data that will confirm which narrative gains dominance. The next inflation report, specifically the Consumer Price Index (CPI), is circled by traders as the next major catalyst. Following that, the next employment report on March 6 will provide further evidence. For now, the impact is clear: a jobs report that beat expectations on the surface pushed yields higher, crushed near-term rate cut odds, and sent Bitcoin lower in a wave of macroeconomic repricing.