Bitcoin (BTC) remains at the center of attention and concern of investors especially after the the latest nonfarm payrolls data from the US Bureau of Labor Statistics (BLS). While the general market sentiment remains optimistic, recent developments in the US economy indicate that macroeconomic factors may be against the major digital currency in 2025.
Currently, Bitcoin trades above $94,000 after another turbulent price performance that resulted in a loss of 3.45% in the last seven days.
Fed's Pivot to Rate Cuts Is Dead – Analysts
In the X post on December 10, market experts at global capital market analysis firm Kobeissi Letter released the employment situation summary for December 2024. According to the BLS, nonfarm payroll employment rose by 256,000 jobs this month, indicating 100,000 additional jobs to the broad figures.
Following this report, Kobeissi Letter analysts highlight that the US economy has gained an average of 165,000 jobs since July representing the highest 6-month average since July 2024.
As the US Federal Reserve began implementing interest rate cuts from September 2024 citing then a slowdown in job growth and inflation, analysts at the Kobeissi Letter said the Apex Bank's approach may have been misleading due to the recent developments.
Therefore, the Fed is expected to hold off on interest rate cuts to combat higher inflation expected due to strong jobs data, with the possibility of even accepting a rate hike.
In general, the lack of rate cuts or the introduction of rate hikes is negative for Bitcoin as lower interest rates enable investors to deal with risky assets such as cryptocurrencies. Following the Fed's previous announcement of possible lower rate cuts in 2025, Bitcoin suffered a flash crash of more than 9% in mid-December as investors moved to short the volatile positions have closed in all financial markets.
Currently, the Kobeissi Letter predicts that the Fed's pivot to rate cuts is likely over, with a 44% probability of no rate cuts by June 2025.
Bitcoin price overview
At the time of writing, Bitcoin is trading at $94,028 showing a gain of 0.22% in the last 24 hours. Meanwhile, the major digital currency is down 3.72% and 6.35% in the last thirty seven days respectively.
Despite the possibility of lower rate cuts in 2025, Bitcoin investors are likely to maintain supportive sentiments due to other factors including historical price performance in a bull cycle, a pro-crypto government expected U.S. and ongoing institutional investments through spot ETFs.
With a market cap of $1.84 trillion, Bitcoin still ranks as the largest digital currency and the eighth largest asset in the world.
Featured image from Investopedia, chart from Tradingview
