Strong US Jobs Data Revives Fed Rate Hike Fears, Triggers $1.7B Bitcoin ETF Outflows

A stronger-than-expected US jobs report has reignited fears of a Federal Reserve rate hike, sending shockwaves through global markets. The May nonfarm payrolls surged by 172,000, far exceeding the Dow Jones consensus estimate of 80,000, according to CNBC. The data prompted traders to sharply increase bets on a rate hike, with the CME FedWatch tool now pricing in a 43% chance of a quarter-point hike by December, up from just 14% a month ago. US Treasury yields rose sharply, and the tech-heavy Nasdaq 100 posted its worst session since April 2025.

Bitcoin ETFs See Record Outflows

The macro shift hit digital assets hard. US spot Bitcoin ETFs recorded $1.72 billion in net outflows for the week ending June 6, the largest since February 2025, per CoinMarketCap. BlackRock's IBIT alone bled $1.34 billion. Andri Fauzan Adziima of Bitrue Research Institute attributed the outflow to the jobs report: a stronger labor market reduces the case for Fed rate cuts, making fixed-income instruments more attractive than non-yielding Bitcoin.

The outflows extended a trend from May, when spot BTC ETFs posted $2.43 billion in combined net redemptions. A broad risk-off shift—driven by geopolitical uncertainty and deteriorating macro conditions—added further pressure, spreading across digital assets, AI stocks, technology equities, and gold.

Crypto Market Sheds $390 Billion

The digital asset market lost approximately $390 billion in total value during the week, with total crypto market cap falling to just above $2 trillion, according to TradingView data cited by CoinMarketCap. Approximately $7 billion in leveraged positions were liquidated, with $5.7 billion being longs. Bitcoin fell 17.3% on the week, while Ethereum dropped 22%, both on track for their steepest weekly losses since the FTX collapse in November 2022.

Four pressures converged: Strategy's first BTC sale since 2022, persistent ETF outflows, a strong jobs report, and a vulnerability discovered in Zcash that triggered a 40% drop in ZEC and rippled across the market. BitMine Chairman Thomas Lee argued the sell-off was a superficial reaction to the Zcash event rather than a fundamental deterioration, as reported by CoinMarketCap.

Asian Tech Stocks Routed

Asian markets opened the week sharply lower. South Korea's KOSPI dropped more than 8%, triggering a circuit breaker, while Japan's Nikkei 225 fell 4%, Taiwan's TAIEX lost 4.25%, and the Shanghai Composite shed 1%, according to CNBC. The tech-led rout erased approximately $1.8 trillion in S&P 500 market cap, per a UOB note. BTSE COO Jeff Mei said traders were cutting exposure to tech equities as geopolitical conflict risk, elevated oil prices, and interest rate concerns accumulated simultaneously.

Bitcoin Diverges from Equities

Despite the sell-off, Bitcoin rose 3% to $63,168 on June 8, diverging from the equity decline. Dominick John of Zeus Research said the move was driven by an oversold technical setup, short covering, and institutional interest, rather than capital rotation out of equities. Min Jung noted the divergence reflects different risk dynamics: equities priced in fear while crypto saw tactical buying, per CoinMarketCap.

BTC's bounce came off a June 5 intraday low of $59,100, its weakest level since February. A subsequent rally to $64,000 on Sunday, June 8, was triggered by news of a potential US-Iran ceasefire, but BTC quickly retreated to $63,000, underscoring the lack of structural conviction behind headline-driven moves. Analysts note that Bitcoin is trading as a leveraged macro sentiment gauge rather than digital gold, as reported by CryptoNews.

Gold and Dollar React

Gold steadied on Monday after hitting its lowest since March 23 at $4,268.39, as prospects of an Israel-Iran ceasefire helped it rebound. Spot gold was up 0.33% to $4,343.03, but gains were capped by the strong jobs report and a near two-month high for the dollar, per CNBC. The dollar neared a two-month high, with traders pricing in a 40% chance of a hike by October, according to CME's FedWatch tool. Markets now await US CPI data on Wednesday for further clues on the Fed's path.

Strategy Hints at BTC Buy

Amid the turmoil, Strategy executive chairman Michael Saylor posted the firm's BTC acquisition tracker chart on June 7 with the caption "A good time to add more dots," reviving speculation of a new purchase, as reported by CoinMarketCap. Strategy holds 843,706 BTC at an average of $75,699, with an unrealized loss of $11.7 billion. A purchase at current prices would lower the average cost basis. The post came ahead of the firm's June 8 annual meeting.

Key Takeaways

1. The May US jobs report showed 172,000 new payrolls, far above the 80,000 estimate, boosting Fed rate hike expectations.
2. US spot Bitcoin ETFs saw $1.72 billion in weekly outflows, the largest since February 2025, led by BlackRock's IBIT.
3. Total crypto market cap fell $390 billion, with BTC and ETH suffering their steepest weekly losses since the FTX collapse.
4. Asian tech stocks plunged, with South Korea's KOSPI triggering a circuit breaker after an 8% drop.
5. Bitcoin diverged from equities, rising 3% on June 8 amid oversold conditions and institutional buying.
6. Gold edged higher but remained capped by a stronger dollar and rate hike fears; CPI data is the next focus.

Sources: CoinMarketCap, CoinMarketCap, CNBC, CoinMarketCap, CNBC, CryptoNews, CNBC, CoinMarketCap, CNBC, CoinMarketCap