Key highlights:
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The US Labor Department revised payroll data downward by 911,000 jobs, marking the biggest cut ever and reflecting significant labor market weakness.
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This sharp revision increases expectations for Federal Reserve rate cuts, despite inflation staying high.
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Bitcoin could mirror gold’s performance and regain momentum aiming for new highs in the fourth quarter.
Bitcoin (BTC) is showing potential for price gains as the US Labor Department revealed the most significant payroll revision on record, reducing 911,000 jobs from prior reports for the year ending March 2025. This overstatement averages 76,000 jobs monthly and surpasses the 2009 correction during the global financial crisis peak.
According to the Kobeissi newsletter, the job losses are concentrated in consumer-related sectors, with 176,000 fewer jobs in Leisure and Hospitality and 226,000 fewer in Trade, Transportation, and Utilities. The total private hiring was inflated by 880,000 jobs, indicating labor market weakness on a scale outside historical recessions like the Great Depression and the 2020 pandemic.
The downward revisions continue a troubling pattern, following a 258,000 job cut from May and June reports last month and an additional 27,000 job reduction recently. With August’s reported growth weak at 22,000 jobs, these figures make a Federal Reserve interest rate cut highly probable at the upcoming meeting.
Gold Prices Reflect Market Sentiment; Bitcoin Poised to Follow
Gold, a classic safe haven asset, has appreciated by 40% this year, with gold mining equities nearly doubling returns, vastly outperforming the S&P 500. Market participants have anticipated that labor market weaknesses will prompt the Fed to reduce rates, even with core Consumer Price Index inflation remaining above 3% and economic growth near 3%.
Bitcoin could see even greater impact. Bitwise strategist André Dragosch noted in a social media post that major USD stablecoins signal expanding macro liquidity even before any Fed rate cuts, suggesting a bullish outlook for Bitcoin aligned with money supply increases.
The Fed hasn’t even cut rates yet—and investors are overlooking Bitcoin’s correlation with money supply. Major USD stablecoins show liquidity expansion, which is bullish for Bitcoin.
Related: Nasdaq invests in Gemini to access crypto custody and staking services.
Bitcoin Expected to Benefit from Liquidity and Policy Shifts
The Federal Reserve is projected to lower interest rates by 25 basis points in the coming week, a historic move given persistent inflation, record-high equities, and strong GDP figures. This unprecedented combination implies the Fed is prioritizing labor market health over inflation concerns, maintaining a cautiously dovish stance.
Bitcoin stands to gain from this environment. Similar to gold’s pre-policy rally, Bitcoin’s sensitivity to liquidity shifts and lean market positioning could turn these unique macroeconomic conditions into a powerful catalyst for a price surge heading into Q4.
Tephra Digital, an analytics platform, recently forecast that if Bitcoin’s lagging correlations with M2 money supply and gold continue, the remainder of 2025 could be promising, with the price potentially reaching between $167,000 and $185,000.
If Bitcoin’s historical correlations with M2 and gold hold, the rest of the year could bring remarkable gains, with targets pointing to $167K to $185K.
Related: Lessons from an advanced Bitcoin university course.
This article is for informational purposes and does not constitute investment advice. All trading and investments involve risk. Readers should perform their own due diligence before making financial decisions.
