Stronger Jobs Data Shifts Fed Rate Outlook, Bitcoin Slumps; Mining Concerns Fuel Blake2b Fork

Jobs Report Resets Rate Cut Expectations

The U.S. labor market delivered an unexpected jolt on Friday with official employment figures showing 162,000 new nonfarm payroll positions in August, substantially exceeding the consensus forecast of approximately 56,000 jobs. The stronger-than-expected employment data triggered a significant market repricing of monetary policy odds, weighing heavily on Bitcoin, which retreated from highs near $81,300 to local lows of $78,600 and was trading near $79,500 at the time of reporting.

The timing of the robust jobs report carries particular significance given the pronounced uncertainty surrounding the Federal Reserve’s September 15-16 Federal Open Market Committee meeting. Market participants had grown accustomed to explicit forward guidance from previous Federal Reserve leadership, but Chair Kevin Warsh has eschewed detailed guidance about rate trajectories, leaving traders to interpret economic data more heavily than in recent precedent.

Rate Decision Remains Uncertain Amid Policy Confusion

Fed Governor Christopher Waller signaled on Thursday his preference for a rate pause pending incoming inflation readings, which initially shifted market probabilities substantially. According to Polymarket, these market-derived probabilities reflected a 60% likelihood favoring a pause against a 40% chance of a 25 basis-point rate increase. However, Friday’s employment figures reversed that momentum, recalibrating odds to an even 50-50 split between the two scenarios.

The stronger labor report prompted U.S. President Donald Trump to renew his criticism of the Federal Reserve’s rate posture. Through Truth Social, Trump urged the Fed Board to “get smart” and become “patriots,” contending that elevated interest rates place the United States at a global disadvantage. While Trump had frequently opposed his predecessor Jerome Powell’s rate decisions, he had largely refrained from similar public pressure on Warsh until the jobs announcement, indicating a shift in his rhetorical stance toward the current leadership.

Mining Centralization Sparks Alternative Bitcoin Implementation

Beyond the immediate market shock, the cryptocurrency sector remains engaged in debates over Bitcoin’s network governance. When the BIP-110 soft fork activated in early August, the network briefly bifurcated into two competing chains: one enforcing BIP-110’s rule changes and another maintaining existing protocols. The BIP-110 chain largely failed to gain mining support, as miners did not devote sufficient computing power to extending that version.

According to Blockchain.com data, only five mining pools control the vast majority of Bitcoin’s computing power, concentrating significant influence over which chain is extended and which transactions are included. This concentration prompted concerns about centralized mining control. In response, a subset of BIP-110 supporters led by LukeDashjr initiated a hard fork on August 30, implementing a proof-of-work algorithm change to Blake2b—a modification designed to enable a more distributed mining ecosystem through DATUM gateway technology. Every address that held SHA-256 Bitcoin prior to August 7 receives an equivalent amount on the Blake2b version.

Blake2b Bitcoin has begun trading on Neoxa exchange at approximately $350 per coin against USDC, though liquidity remains limited with a 1.1% spread, signaling nascent market interest in the alternative implementation. For the broader cryptocurrency market including alternative assets, these developments underscore how macroeconomic policy uncertainty and decentralized governance tensions simultaneously reshape digital asset valuations and network incentives.

Source: Cointelegraph. Not financial advice.