Friday turned into a brutal day for financial markets, even though the only notable news was positive: the US released its strongest jobs report in a year and a half. Most assets tumbled, confusing many observers.
What Exactly Happened?
Bitcoin plunged to $59,100, its lowest since November 2024, dragging altcoins down and triggering over $1.7 billion in liquidations. But crypto wasn’t alone. Gold, usually seen as a stable safe-haven asset, dropped more than 4% in a single day, from over $4,500 to $4,315. Wall Street felt the pain too: the S&P 500 lost $2 trillion in market cap, and the Nasdaq 100 saw its worst drop since Trump’s so-called “Liberation Day” over a year ago. Shockingly, most of these losses happened after the jobs report went live—a report that was highly promising, the strongest in 18 months. Even the POTUS seemed confused by the sell-off.
So Why Did Markets Drop?
The answer, according to analysts at Nansen and the Kobeissi Letter, lies in how markets interpret strong jobs data. Strong employment kills the narrative that the Federal Reserve will cut interest rates soon. Bitcoin, already down 15% and sitting on uncleared leveraged longs, has no macro catalyst to recover. Middle East tensions are keeping risk appetite soft.
The Kobeissi analysts noted that when the Fed made its first rate cuts in 2025, it was “specifically because of labor market weakness,” not because inflation hit the 2% target. With inflation rising again due to the war with Iran, the bond market had held onto hopes of rate cuts because of a supposedly “weak” labor market. Friday’s report flipped that sentiment. Job openings rose by over 730,000 in April, while experts expected no change. Available employment jumped to 7.6 million, the highest in two years.
As a result, markets now see the “most hawkish shift in Fed expectations since post-pandemic stimulus.” Experts believe there will be rate hikes by early 2026, while just months ago expectations suggested up to four cuts.
Additional Pressure on Crypto
Adding fuel to the fire, Bitcoin is now down 53% since October. It fell 20% this week alone, and the entire crypto market has lost about $2.5 trillion since October 2025. The bear market gained momentum and crushed risk appetite.
Separately, reports say Meta is considering raising “tens of billions of dollars” through a stock offering to fund AI development, similar to Google’s $85 billion raise. Such moves increase investor concerns that big tech might flood the market with equity raises. SpaceX’s IPO, scheduled for June 12, could also be a factor, as funds may be selling to make room for that major event.
Sum it all up, the analysts concluded: the market, which was up 20% in two months, was overdue for a decline like Friday’s.
