US jobs report boosts odds of 2026 Fed rate hike; crypto slips
The US jobs report showed May nonfarm payrolls of 172,000, about double expectations, while the unemployment rate stayed at 4.3% and prior months were revised up. The US jobs report shifted market focus from “cuts” to “hikes,” raising the probability of a 25bp Fed rate hike by December 2026 to about 68% (from 52%) on CME FedWatch.
In rates, 2-year Treasury yields rose roughly 9–13 bps to around 4.13%–4.17%. That tighter-funding backdrop hit risk assets: total crypto market cap fell by about $390 billion in the week around the report. Bitcoin traded after the selloff in a $61,000–$62,000 range, and Ether also declined.
For crypto traders, the message is clear: higher Treasury yields increase the opportunity cost of holding BTC and other high-volatility assets, and they can raise margin pressure for retail positions. The article also notes this dynamic echoed the 2022–2023 hiking cycle, when BTC slid sharply from near $69,000 to below $16,000 during tightening.
Bearish
The US jobs report came in well above forecasts, prompting traders to price a higher likelihood of a 2026 Fed rate hike. That repricing lifted 2-year Treasury yields and typically shifts flows from volatile risk assets (crypto) toward safer fixed income. The immediate market reaction supports this: total crypto market cap dropped about $390B and BTC/ETH sold off.
Short term, this increases downside risk because higher yields raise the opportunity cost of holding BTC and can squeeze leveraged positions via higher funding/margin costs. Traders may also expect continued volatility around macro releases as rate expectations keep being adjusted.
Longer term, if the hiking bias persists, institutional allocators may further reduce high-volatility exposure, which can cap rallies. This resembles the 2022–2023 tightening cycle referenced in the article, when BTC suffered a prolonged drawdown as yields climbed and rate-cut expectations weakened. A bullish reversal would likely require data that reopens the “cuts” narrative and pushes yields back down.