Bitcoin
Bitcoin's latest advance followed a sharp change in momentum during the second half of August, when the cryptocurrency moved above $70,000 and later reclaimed $80,000. Getty Images

Bitcoin was on course for a third consecutive weekly gain Friday after climbing above $82,000 overnight, extending a rebound that began when the cryptocurrency broke out of the $60,000-to-$70,000 range that had held for much of the summer.

The world's largest cryptocurrency topped $82,000 and reached its highest level since May 11, before falling more than 2% at 1:36 p.m. ET.

Bitcoin's latest advance followed a sharp change in momentum during the second half of August, when the cryptocurrency moved above $70,000 and later reclaimed $80,000. The rally coincided with renewed interest in the so-called debasement trade, in which investors shift money toward assets such as Bitcoin and gold when concerns about currencies, government debt or monetary policy increase.

The U.S. Treasury helped trigger that trade last month after announcing plans to increase purchases of longer-dated government bonds in an effort to contain borrowing costs. The move pushed long-term yields lower and weakened the dollar at the time, while Bitcoin and gold climbed.

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That backdrop changed Friday after the Labor Department reported a much stronger-than-expected increase in U.S. employment. Nonfarm payrolls rose by 162,000 in August after an upwardly revised gain of 21,000 in July, while economists surveyed by Reuters had expected an increase of 56,000. The unemployment rate remained at 4.1% even as the labor force expanded by 683,000.

Investors responded by increasing bets that the Federal Reserve will raise interest rates at its Sept. 15-16 meeting. Short-term interest-rate futures showed roughly a 65% probability of a rate increase after the jobs report, up from about 55% beforehand, while Treasury yields rose and the dollar strengthened.

The stronger employment figures also pressured U.S. equities. The S&P 500 and Dow Jones Industrial Average fell Friday as traders reassessed the outlook for interest rates, with the jobs data giving the Fed more room to focus on inflation after months of uneven labor-market readings.

Inflation has remained a central concern as energy prices rise again during renewed fighting between the United States and Iran. Brent crude was on course for a weekly gain of more than 6% Friday, while West Texas Intermediate had risen more than 8% for the week as the two countries exchanged fresh attacks in the seventh month of the conflict. U.S. diesel prices also reached a record high.