Bitcoin slumps below $80,000 on Fed rate hike expectations

Bitcoin fell below the $80,000 level as stronger-than-expected US job figures in August renewed expectations that the Federal Reserve could raise interest rates at its next policy meeting in September.

The August employment report outperformed forecasts, signalling robust labour market conditions in the world's largest economy. This data point intensified market pricing for a rate hike, causing investors to reassess positions in higher-risk assets including cryptocurrencies, which typically underperform during periods of rising borrowing costs.

The cryptocurrency's decline reflects a broader market dynamic where digital assets have become increasingly sensitive to shifts in US monetary policy expectations. When interest rates rise, investors shift capital away from speculative holdings towards safer, yield-bearing alternatives such as government bonds and savings accounts.

Market analysts noted that crypto investors were closely monitoring the Fed's next moves, with the September policy decision now viewed as a critical juncture for digital asset valuations. The employment data has narrowed the perceived window for the central bank to maintain its current accommodative stance, pressuring Bitcoin and other cryptocurrencies that had benefited from expectations of unchanged or lower rates.