The economy added 172,000 jobs in May. Wall Street wanted about half that. The result was a bloodbath across virtually every risk asset class, from tech stocks to Bitcoin, as traders recalibrated their expectations for what the Federal Reserve does next.
The Nasdaq Composite dropped roughly 4% to 4.2% on June 5, its worst single-day decline in more than a year. The S&P 500 fell over 2.6%, snapping a nine-week winning streak. Bitcoin slid to the $61,900 range, with some exchanges showing brief wicks below $60K.
A jobs report nobody wanted
Economists had penciled in somewhere around 80,000 to 85,000 new nonfarm payrolls for May. The actual number came in at 172,000, more than double the consensus estimate. The unemployment rate held steady at 4.3%.
The CME FedWatch Tool reflected the shift almost immediately, with traders marking up the odds of the Fed raising rates later in 2026.
Bond yields surge, risk assets retreat
The Treasury market moved fast. The 10-year yield jumped past 4.5%, its highest level in a year. The 2-year yield, which tracks near-term rate expectations more closely, climbed to 4.16%, also a 12-month high.
Bitcoin, which had been trading comfortably above $63K heading into the report, shed roughly $2,000 in value within hours. Some exchanges recorded brief dips below the psychologically important $60K mark before a modest bounce.
Gold, often considered a safe haven during equity selloffs, didn’t escape either. The precious metal also declined on the same day, underscoring that this was a broad-based repricing of rate expectations rather than a simple rotation out of stocks.
What this means for crypto investors
Bitcoin’s reaction to a US labor report would have been unthinkable five years ago. But crypto has steadily integrated itself into the broader financial system, and with that integration comes sensitivity to the same macro forces that move traditional markets.
The mechanism is straightforward. Higher interest rates increase the opportunity cost of holding non-yielding assets. Bitcoin generates no dividends, no coupon payments, no cash flow. When Treasuries yield 4.5%, investors have to believe Bitcoin will appreciate by more than that just to break even on a risk-adjusted basis.
Look at the pattern over the past year. Every time rate cut expectations have increased, Bitcoin has rallied. Every time those expectations have been walked back, it has sold off.