Today in crypto, the Bitcoin price received a boost from a stellar US jobs report. A new report from Binance Research has raised concerns about Ethereum’s sound money narrative as its inflation rate rises. Meanwhile, social mentions of a historically bullish phrase for October have tanked alongside the crypto market.
Bitcoin hits $62,000 following US jobs report
The price of Bitcoin (BTC) rallied on Oct. 4 after the US Labor Department reported an unexpected surge in job creation in September.
Data from Cointelegraph Markets Pro and TradingView showed Bitcoin trading above $62,200. The gains were associated with a broad rally in equity markets.
The main catalyst for the rally came from the September nonfarm payrolls report, which showed the US economy adding 254,000 jobs — well above the 147,000 expected. The unemployment rate also edged lower to 4.1%.
“The clear answer here is that risk appetite is incredibly strong,” wrote The Kobeissi Letter, a financial publication. “Markets are perceiving all news as good news for the first time in years.”
The jobs report seemed to confirm that the US economy remained strong at the end of the third quarter, which caused investors to reprice their expectations for aggressive Federal Reserve rate cuts.
CME Group’s FedWatch Tool showed a declining probability of another large rate cut in November. Source: CME Group
According to CME Group’s fed fund futures prices, the likelihood of another 0.5% rate cut in November plunged from over 50% last week to just under 2% on Oct. 4.
Ethereum inflation rises, threatens “ultrasound money” status
Ethereum’s inflation rate has surged to 0.74%, raising concerns about its long-held “ultrasound money” narrative, according to Binance’s October 2024 Monthly Market Insights report.
The research report indicated that the Ether (ETH) issuance rate is at its highest level in two years, as reduced onchain activity and lower burn rates shift the asset’s economic status.
Graph depicting the change in ETH issuance outpacing burn rate in 2024. Source: Binance Research
The findings highlight a growing issue for the asset, which Vitalik Buterin co-founded. They cast doubt on a long-held assumption that ETH can maintain its deflationary nature.
The rise of layer-2 solutions like Arbitrum and Optimism has substantially impacted the onchain activity of the Ethereum layer-1 blockchain.
These L2 networks process transactions off the Ethereum mainnet, lowering gas fees and, in turn, reducing the amount of ETH being burned through transaction fees.
“Uptober” social mentions tank amid crypto rout
Bullish crypto sentiment for October, dubbed “Uptober,” has been waning as markets continue to retreat, with analytics provider Santiment noting social media mentions of “Uptober” have dropped since the beginning of the month.
“Traders have become much more bearish on the idea of this month being an automatic money printer for crypto,” it said on Oct. 3.
Social media has instead seen memes and mentions of “Selltober” and “Octobear.”
Source: Santiment
Bitcoin (BTC) has lost around 4.7% since its Oct. 1 high of $64,000 to briefly dip below $60,000.
But October has been historically bullish for Bitcoin, with it gaining price in October in nine out of the past eleven years.
Santiment founder Maksim Balashevich said the recent lack of optimism opens the door for a short-term price pump.
“Uptober excitement wanes as the market dips, which does open the door for a rebound. Whether the bigger downtrend is over remains to be seen,” said Balashevich.
