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Crypto prices get big bounce after positive US jobs report

By Monte Stewart


Updated

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In this article:
BCH/USD
Bitcoin Cash / USD
112.95 USD
2.7 +2.470%
DOGE/USD
DogeCoin / USD
0.0992408 USD
0.0030504 +3.190%
LTC/USD
Litecoin / USD
78.71 USD
1.64 +2.130%
XMR/USD
Monero / USD
151.49 USD
4.4 +3.070%
XMR/USD
Monero / USD
151.49 USD
4.4 +3.070%

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Bitcoin on a background of US bills
Bitcoin rises above $40,000 on Friday. - Photo: Shutterstock

Bitcoin and other cryptocurrencies rose higher on Friday following the release of a stronger-than-expected US jobs report.

At least one analyst cited the report as a possible cause of bitcoin’s rise to above $41,000 by 8 p.m. EST after market close, and corresponding increases in other digital coin prices, while others were skeptical.

Bitcoin, the world’s the most valuable cryptocurrency, was up 9.84% in late afternoon trading on the West Coast as 687,703 units changed hands.

Jason Deane, bitcoin analyst at Quantum Economics, told Coindesk that that "bitcoin's recent moves do seem to have coincided with the latest US jobs report, and it's possible this may simply have acted as catalyst for an overdue market move."

Jobs total exceeds estimates

The US gained 467,000 jobs in January. Economists polled by Wall Street had forecast 150,000 new jobs in January, according to MarketWatch.

Ethereum, the world’s second-largest crypto asset rose more than 10%, surpassing $2,900. Most other crypto assets also enjoyed healthy gains, with Avalanche rising more than 11%.

At the close of the market day in the US, litecoin was 8.18% up, monero was 9.94% up, bitcoin cash was 7.05% higher, and dogecoin was 4.73% higher.

Some analysts also flagged the possibility of a short squeeze, according to Coindesk.

Rutger van Faassen, head of innovation, new markets and industry ecosystems at New York-based data intelligence firm Curinos, told Capital.com that he thinks the cause of the rise is hard to pinpoint.

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No clear reason 

“I don’t think there is yet a very clear reason why crypto goes up or down,” he said. “Some people would say it’s related to tech. There seems to be some correlation with tech stocks. But I think, right now, it’s a very volatile market. I don’t think anyone has really figured out why it’s up or down.”

BTC/USD

17,273.40 Price
+2.490% 1D Chg, %
Long position overnight fee -0.0500%
Short position overnight fee 0.0140%
Overnight fee time 22:00 (UTC)
Spread 66.00

ETH/USD

1,283.47 Price
+3.980% 1D Chg, %
Long position overnight fee -0.0500%
Short position overnight fee 0.0140%
Overnight fee time 22:00 (UTC)
Spread 5.50

XRP/USD

0.40 Price
+3.120% 1D Chg, %
Long position overnight fee -0.0500%
Short position overnight fee 0.0140%
Overnight fee time 22:00 (UTC)
Spread 0.00419

DOGE/USD

0.10 Price
+3.190% 1D Chg, %
Long position overnight fee -0.0500%
Short position overnight fee 0.0140%
Overnight fee time 22:00 (UTC)
Spread 0.0015022

He said crypto also behaves a lot like fiat, or regular, currencies. Consumers are also having an impact.

“I think the challenge with crypto is that there’s still a whole portion of just consumers there, right?” he said. “They can really change the dynamic. If it’s all professional traders (doing the investing), you can pretty much see what happened.”

Bulls trying to fight

Independent crypto analyst and investor Jeremy Cowen, who has more than 700,000 YouTube followers, was impressed that bitcoin surpassed $39,000.

“The bulls are, at least, trying to put up a fight,” he said in a YouTube presentation.

He said the rise is “entertaining” and somewhat noteworthy.

“A lot of people have been fairly bored with price action over the last few months,” Cowen said.

But Cowen took a wait-and-see approach on what Friday’s increase could mean for the price of bitcoin going forward. He wants to see how the price moves on a weekly basis.

“What I would say how is: Proceed with caution,” Cowen said.

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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