Bitcoin Soars, SOL Shines as Economists Mock Recession Hype

Markets

What to know:

Asset prices mirrored a remarkably cheerful mood on Wednesday, with Bitcoin reclaiming the $112,000 mark and European stocks opening in the green, as analysts increasingly dismissed fears of stagflation and recession sparked by the dismal U.S. jobs data. 🎉

On Tuesday, the U.S. Bureau of Labor Statistics delivered a bombshell: The economy had likely added 911,000 fewer jobs than originally reported in the 12 months through March 2025. 🕵️‍♂️

To put it mildly, for over a year, equity and crypto market enthusiasts had been taking risks, reassured by what they believed to be a robust labor market, keeping the economy afloat despite stubborn inflation. This newfound skepticism sent BTC tumbling from $113,000 to $110,800 in a heartbeat. 💔

Some market players saw the BLS revision as a harbinger of an impending recession. However, Michael Englund, the principal director and chief economist at Action Economics, argued that the data revealed little about the business cycle or the state of the economy. 🤷‍♂️

“These revisions tell us more about the long-term trajectory of the U.S. labor force rather than our position in the business cycle. They don’t raise our perceived risk of recession, even if they suggest that the trend growth for monthly payrolls is now likely a two-digit gain, measured in thousands, rather than a three-digit gain. We now assume a trend growth for the labor force of 90,000 going forward, rather than the 150,000-200,000 gains seen during most of the current expansion,” Englund stated in an email to CoinDesk. 📊

He elaborated that the rapid growth in the U.S. labor force post-COVID, which exceeded economists’ forecasts, was primarily driven by a net annual in-migration of about one million people. This trend has now reversed, with an estimated net out-migration of between one and two million. 🚪

“This shift to a lower, long-term growth path for the labor force suggests slower growth in civilian employment as measured by household surveys and nonfarm payrolls from establishment surveys moving forward,” Englund added. 📈📉

Financial markets seemed to concur, as European stocks opened higher today, with BTC back above $112,000. Altcoins like Ether (ETH), XRP, and Dogecoin have recovered much of Tuesday’s losses. Meanwhile, Solana’s SOL (SOL) has surged to $222, its highest since February 1st. The S&P 500 futures traded 0.3% higher, and European stocks posted gains at the open. 🚀

Stagflation Fears Overblown

The BLS revisions and the looming U.S. CPI data, expected to show inflation stubbornly at around 3% (well above the Fed’s 2% target), have reignited fears of stagflation-a condition marked by persistent high inflation, high unemployment, and sluggish economic growth. Stagflation is widely regarded as the worst-case scenario for risk assets, including Bitcoin. 🌡️💸

However, Marc Chandler, Managing Partner and Chief Market Strategist at Bannockburn Global Forex, contends that fears of stagflation are overblown, noting that the U.S. GDP remains above the Federal Reserve’s “trend estimate” or non-inflationary pace. 🤓

“I believe stagflation is still exaggerated. The Atlanta Fed tracker still shows the GDP well above the Fed’s trend estimate, its non-inflationary pace,” Chandler told CoinDesk. 📈

While inflation is indeed elevated and likely to rise with the August CPI report on Thursday, Fed officials such as Waller and Bowman prefer to overlook tariff-related increases. 🤔

“It seems clear that the Fed will resume its easing course next week,” Chandler added. 🏦

Traders have penciled in a 91% chance of the Fed cutting rates by 25 basis points to 4% on September 17, according to the CME’s FedWatch tool. Some investment banks and traders anticipate a more substantial 50-basis-point rate cut. 📉

Focus on U.S. CPI

These easing expectations could intensify if Wednesday’s U.S. producer price index (PPI) and Thursday’s consumer price index (CPI) unexpectedly signal disinflation, bolstering risk assets in the short term. 📈

However, heightened expectations could also set the stage for disappointment. 🤞

“I think the CPI print this week will provide more clarity… If the market expects a 50-basis-point cut, but the FOMC meeting on September 17th only delivers 25 basis points, we’ll see a sell-off,” Greg Magadini, Director of Derivatives at Amberdata, told CoinDesk. 📉💔

Read More

• BTC PREDICTION. BTC cryptocurrency

• EUR USD PREDICTION

• USD JPY PREDICTION

• USD KZT PREDICTION

• ETH PREDICTION. ETH cryptocurrency

• USD VES PREDICTION

• GBP JPY PREDICTION

• USD TRY PREDICTION

• GBP EUR PREDICTION

• Silver Rate Forecast

2025-09-10 12:44