BTC Price Index and Live Chart – CoinDesk”>(BTC).

While the recent sharp drop in interest rates has certainly played a part, the main reason that bitcoin rose to $44,000 at the beginning of October from $27,000 is the optimism surrounding what appears to be imminent U.S. regulator approval of a bitcoin spot ETF.

The rate hopes also fueled gains in traditional markets, with the S&P 500 registering an 8.9% gain in November. Long-dated bonds almost erased what had been historically high year-to date losses, while gold rose to an all time high of $2,100 an ounce.

Market expectations have led to lower interest rates. The U.S. Federal Reserve is expected to reduce interest rates in the first quarter 2024 if inflation and the economy continue to slow.

A pause is certainly a good idea, but there has been little evidence to date that the economy has slowed enough to warrant such a rapid shift by the Federal Reserve. The Federal Reserve will need to see either a significant slowdown in the employment gains, which have averaged 212,000 in the last four months, or one or two monthly negative prints.

Economists expect Friday’s report will show that 185,000 jobs were added in November. The unemployment rate is expected to remain at 3.9%, unchanged from October. A large miss on the downside will likely reinforce bets for lower interest rates, and could fuel bitcoin’s rise to $50,000. However, if 200,000 new jobs are added or more, this could cause bets to reverse and halt bitcoin’s recent rise.