The U.S. economy added 172,000 jobs in May, roughly double what economists expected, reshaping Federal Reserve policy expectations. The conversation has shifted from when the Fed might cut rates to when it might hike again.
The unemployment rate held steady at 4.3%, and prior months' figures were revised upward. Traders responded swiftly: the probability of a quarter-point rate hike by December 2026 surged to roughly 68%, up from 52% before the report.
Two-year Treasury yields climbed to between 4.13% and 4.17%, making safe government bonds more attractive relative to volatile assets.
The total digital asset market cap dropped by approximately $390 billion in the week surrounding the report. Bitcoin settled between $61,000 and $62,000, while Ether also faced substantial declines. This dynamic mirrors the 2022-2023 hiking cycle, when Bitcoin fell from nearly $69,000 to below $16,000.
During periods of monetary tightening, institutional allocators reduce exposure to high-volatility assets, while retail traders face rising margin costs alongside benchmark rates.