Bitcoin Faces A Black Swan — Bitwise Sounds The Alarm

US July Employment Situation released on Friday has caused traders to review both macro and Bitcoin near-term paths. The US July Employment Situation report released last Friday was a statistical shock. Its record-high negative revisions, which reduced the average hiring for the past three months to just 35,000, erased nearly all the momentum reported in the second quarter. Bureau of Labor Statistics reports that only the Covid bankruptcy brought about such large-scale revisions.

Bitcoin: Is it Really at Risk of a Black Swan Event?

Bloomberg Economics chief US economist Anna Wong wrote: “The downward revisions to May and June payrolls in the July jobs report constitute a black swan event – a three-standard-deviation move with less than a 0.2% chance of occurrence in the last 30 years. Adjusted for our estimate of the job overstatement from the Bureau of Labor Statistics’ birth-death model, the three-month hiring pace turns outright negative.” In a note sent out Friday, the author wrote: “The data.” “flipped the labor-market script” From re-acceleration through to sudden cooling

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The market’s crypto voice on the issue has been Bitwise Europe’s head of research, André Dragosch, who spent the morning posting a string of warnings on X. The first thing that happened was the announcement. “According to Bloomberg chief economist Anna Wong, the most recent payroll revisions were a ‘black swan event’.Will probably get even worse before it gets better…”The maxim is: “Yes – bad for payrolls = good for bitcoin, at least over the medium to long term.”

He then argued, minutes later, that deeper revisions might force an emergency ease: “NOTE: There is a strong case for a negative June jobs print after further downside revisions which could lead to a 50 bps rate cut in September… Plan accordingly. #Bitcoin”

Mid-afternoon, he had taken the argument to its logical conclusion: “ATTENTION: We are probably just a single negative NFP print away from a significant repricing in Fed rate cut expectations. US labor market & inflation data surprises are still as bad as during Covid but traders only price in 2 cuts until Dec 2025… Printer is coming… “

Dragosch was the beneficiary of a sharp move in interest-rate futures. On Wednesdays, the CME FedWatch Tool showed a 91 percent probability of at least one cut at the 17–18 September FOMC meeting. Neel Kazhkari of the Minneapolis Fed acknowledged that “the real underlying economy is slowing,” Lisa Cook has estimated the extent of the changes “concerning.”

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Bitcoin’s current price reflects the struggle between Bitcoin and other cryptocurrencies recession fear The hope for liquidity. After the release of payroll data and Donald Trump’s firing of BLS commissioner Erika McEntarfer, Bitcoin fell to $111920, its lowest value since early July. As rate-cutting odds soared in this week, a tentative recovery towards $111 500 followed. Bitcoin was still tied to the macro-news rather than following its own cycles.

The first indication of a shift towards a more lenient policy can be seen in the fund flow. The net flow of funds into Bitcoin-related ETFs on the 7th August was $91.6m, ending a period where they had been stagnant. outflow streak This had cost more than 380 millions dollars in vehicle repairs.

Bloomberg’s and Dragosch’s framing of the black swan will be determined by the Fed’s risk tolerance and how the data is printed in the future. Now the market is stuck between these poles. One bad job number could trigger a policy reaction, while another would send it into a spiral of risk-off. As Wong’s probabilistic maths and Dragosch’s public alerts both suggest, the only certainty is that there’s no margin for error.

BTC is currently trading for $116.359.

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