First week of ‘Uptober’ rather negative for Bitcoin because of Japan, Iran and US Jobs numbers

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Last Updated on 6 October 2024 by CryptoTips.eu

Currently, one of the most popular memes about Bitcoin and crypto comes from the ‘AutismCapital’ account on X (which gets mentioned quite often by the likes of Elon Musk and others celebrities). It shows a meme in which Milton from ‘Office Space’ stares rather negatively at a screen with the most important crypto prices of the past few days. They are all trading negatively while above Milton’s head the phrase ‘I was promised an ‘uptober” is written.

After about a week in what is traditionally one of the best months for Bitcoin, we indeed have to ask: is this it? Due to the possibility of a regional war in the Middle East between Iran and Israel, which would be bad for oil prices and therefore the economy, Bitcoin is about where we were two weeks ago, and also some 5% lower than at the beginning of the month.

In addition, the latest US jobs figures make us fear that Powell will cut rates by only 25 basis points next month (instead of the hoped-for 50) while Japan chose a prime minister who could stop the Yen carry trade. An overview.

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Iran Israel

First, there is Iran Israel. Because stock markets and crypto markets are nervous about the possible expansion of the conflict into a regional war and with the anniversary of the October 7 attacks tomorrow, the tension is palpable. Investors are keeping their fingers crossed while high-risk investments are becoming slightly riskier.

Due to the American presidential elections that will take place next month, Joe Biden is also bound not to intervene directly as he could be seen as wanting to swing the election in the Democrat’s favor.

Geopolitically, there is also the situation in Japan which is disadvantageous for Bitcoin; When the Yen carry trade slowed in early August (as Japanese long-term interest rates rose for the first time in a decade), Bitcoin suddenly fell by about $10,000 to just below the psychologically important $50,000 mark.

The election of Shigeru Ishiba as leader of the Liberal Democrats (the largest political party in Japan that provides the prime minister) early last week was therefore also bad news for Bitcoin.

He stated that the ultra-low interest rates in Japan are not sacrosanct and if it is beneficial for the Japanese economy, he believes they should be allowed to rise. That would be bad for US investors, and bad for Bitcoin (since US investors borrow in Yen at very low interest rates and invest that money in risky assets like tech stocks and Bitcoin).

American jobs

Finally, the news came on Friday that the American economy is doing better again.  In September, about 250,000 jobs were added, while economists had expected only 140,000 jobs. That’s good news for the economy, and bad news for investors in the short term.

The chance that Jay Powell, head of the Federal Reserve in the United States, will cut long-term interest rates by 50 basis points next month has therefore become much lower. A reduction of 25 basis points or no reduction at all is therefore once again a possibility.

Bitcoin, meanwhile, continues to trade above $50,000 for the 7 month in a row but lacks a boost to take it back above the ATH of $74,000

At the time of writing, the largest digital currency is trading for $62,000.

Jeroen Kok

Jeroen is one of the lead copywriters on Cryptotips.eu and discusses all recent events in the crypto market. This includes news updates, but also price analyzes and more. He developed his passion for cryptocurrency during the bull run in 2017. He has learned a lot since then. The combination of cryptocurrency and creative writing is perfect for Jeroen and an excellent way to share his knowledge with a wide audience. Find me on LinkedIn / jeroen@cryptotips.eu
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