Bitcoin swung sharply after a stronger-than-expected US jobs report complicated expectations for the Federal Reserve’s Sept. 15-16 policy meeting, falling from about $81,300 to $78,600 before recovering toward $79,500. The move followed data showing US employers added 162,000 nonfarm payroll jobs in August, far above the 56,000 consensus forecast.
The employment surprise places the Fed under renewed pressure to balance inflation risks against signs of stress in rate-sensitive parts of the economy. A stronger labour market can give policymakers more room to keep borrowing costs elevated, while financial markets had been trying to determine whether the central bank was preparing to pause or raise rates again.
Bitcoin’s intraday drop showed that the market remains highly responsive to changes in US monetary-policy expectations. Higher interest rates generally increase the appeal of cash and government debt while raising financing costs across the economy, conditions that can reduce demand for volatile assets including cryptocurrencies.
Jobs data reshapes expectations ahead of the Fed meeting
The August payroll figure was nearly three times the consensus estimate and arrived less than two weeks before the Federal Open Market Committee convenes. The report did not settle the policy outlook, but it weakened the case for an immediate rate cut that had been promoted by President Donald Trump.
Christopher Waller, a Federal Reserve governor, said Thursday that he would favor keeping rates unchanged while awaiting additional inflation data. That comment had pushed Polymarket pricing toward a pause, with contracts implying a 60% chance of no move and a 40% probability of a 25-basis-point rate increase.
After the employment report, Polymarket odds shifted back to an even split, with both a pause and a quarter-point increase priced at roughly 50%. Prediction-market probabilities are not official forecasts, but the swing illustrates how quickly traders have adjusted their views as new economic data arrives.
Fed Chair Kevin Warsh has offered limited forward guidance, leaving greater weight on incoming data and the possibility of dissenting votes among policymakers. That uncertainty can produce larger moves in Bitcoin and other liquid risk assets around inflation releases, employment reports and Fed statements.
A payroll gain of 162,000 does not by itself determine the Fed’s next action. Policymakers will also assess wage growth, unemployment, inflation measures and financial conditions. Commercial real estate and other heavily financed sectors remain exposed to elevated borrowing costs, a factor that could argue for caution even if headline employment remains resilient.
Trump renews demands for lower rates
Trump responded to the jobs report by calling for rate cuts in a Truth Social post, extending his public criticism of the Fed’s restrictive stance. He had previously attacked former Fed Chair Jerome Powell over the absence of rate cuts, while his criticism of Warsh became more direct on Friday.
The White House and the Federal Reserve are institutionally separate, and the Fed’s mandate requires policymakers to pursue price stability and maximum employment rather than respond to political demands. Yet presidential comments can add to market volatility when the policy outlook is already closely divided.
The political backdrop gives the Sept. 15-16 meeting an added layer of scrutiny. A rate increase after a strong payroll report could reinforce concerns that policymakers remain focused on inflation. A pause, particularly if paired with cautious language, would leave markets debating whether the Fed sees slowing conditions beneath the headline jobs number.
BIP-110 supporters launch a separate Blake2b chain
Away from macroeconomic trading, supporters of the disputed BIP-110 Bitcoin proposal have continued a separate blockchain after the original effort failed to gain sufficient miner support on Bitcoin’s SHA-256 network.
BIP-110 activated on Aug. 7 and briefly created two chains: one enforcing the proposal’s rules and another operating under Bitcoin’s existing consensus rules. The BIP-110 branch largely stopped progressing after miners did not provide enough computing power to keep extending it.
A group led by Bitcoin developer Luke Dashjr then moved the effort to a Blake2b proof-of-work algorithm through a hard fork initiated Aug. 30, using DATUM gateway technology. Proof of work is the mechanism through which miners compete to add blocks and secure a blockchain; changing the algorithm means the new network relies on a different mining ecosystem than Bitcoin itself.
The group’s design gives holders of Bitcoin on the SHA-256 chain before the Aug. 7 split a corresponding balance on the Blake2b chain, according to the project’s stated approach. Assets created through a chain split can carry technical and operational risks, including replay issues, wallet compatibility problems and thin trading markets.
The Blake2b chain has recorded early transactions around $350 per coin, with a reported bid-ask spread of 1.1%. Sparse liquidity makes such price points difficult to interpret: small orders can move the market sharply, and quoted prices may not reflect the value available for larger trades.
Mining concentration remains central to the dispute
The BIP-110 dispute has revived arguments over mining concentration and the practical power of large pools in Bitcoin’s consensus process. The supplied network data put Foundry USA at 27.7% of mined blocks and AntPool at 17.2%, while five pools accounted for most of the network’s hashrate.
Mining pools do not have unilateral authority to rewrite Bitcoin’s rules, since node operators, users, developers and businesses also determine which software they run. Their decision to allocate or withhold hashpower can nevertheless decide whether a proposed chain remains operational, as the stalled BIP-110 branch demonstrated.
For Bitcoin traders, the two developments point to different forms of uncertainty. The employment data has made the immediate interest-rate path harder to price, while the Blake2b fork illustrates how a technically functioning chain can struggle without sustained mining support and deep market liquidity.
For deeper insight on rate decisions and BTC swings, read how Fed rate cuts influence Bitcoin volatility next.
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