Bitcoin Just Had Its Best Month Since 2024. A Crucial Jobs Report Could Put That Rally To The Test.

Bitcoin began September near $78,000 after its strongest monthly gain in nearly two years, but Friday's U.S. jobs report could quickly test the rally as traders sharply increase bets that the Federal Reserve will raise interest rates later this month.

The cryptocurrency gained about 24% in August, its best monthly performance since November 2024. Investors are now turning their attention to the August employment report, the final major labor-market reading before the Fed's Sept. 15-16 policy meeting.

Expectations for higher interest rates have changed rapidly since Fed Chair Kevin Warsh's Jackson Hole speech last week, when he said policymakers still had work to do if inflation did not move convincingly toward the central bank's 2% target. Traders on Tuesday were assigning roughly a two-thirds probability to a quarter-point September rate increase, according to CME data cited by the Wall Street Journal, up from less than 40% a week earlier.

The first major labor reading of September offered a mixed picture Tuesday, with U.S. job openings rising by 89,000 to 7.27 million in July while hiring fell by 278,000 to 5.05 million. Reuters reported that economists expect nonfarm payrolls to rebound in August after an unexpected decline in July, leaving Friday's report particularly important for expectations surrounding the Fed.

The Bureau of Labor Statistics is scheduled to release the August employment report at 8:30 a.m. ET Friday. A stronger-than-expected reading could reinforce expectations for higher rates, while weaker hiring could give policymakers more reason to weigh labor-market risks alongside persistent inflation.

Bitcoin is already contending with rising bond yields and higher energy prices following renewed fighting involving the U.S. and Iran. The benchmark 10-year Treasury yield approached 4.8% Tuesday as oil prices climbed, with Reuters reporting that markets were increasingly pricing in tighter monetary policy as energy costs revived inflation concerns.

Crypto investors will get another major policy event days after the jobs report. The Federal Reserve begins its two-day meeting Sept. 15 and will announce its interest-rate decision Sept. 16, while the Senate is also expected to take a procedural step on the crypto industry-backed CLARITY Act on Sept. 15.

The legislation, which would establish a federal regulatory framework for digital assets, has struggled to advance despite heavy industry lobbying. Reuters reported that Senate Majority Leader John Thune filed for a Sept. 15 procedural vote as lawmakers remain divided over ethics rules, anti-money-laundering safeguards and protections sought by banks.