Nonfarm Payrolls Shock Reshapes Rate-Cut Expectations
The US labor market surprised to the upside this week, with August nonfarm payrolls coming in at 162,000 new jobs — well above the roughly 56,000 that economists had penciled in. The stronger-than-anticipated print immediately weighed on risk assets, and Bitcoin (BTC) was no exception. The leading cryptocurrency dropped from around $81,300 to intraday lows near $78,600, and at the time of publication was hovering near $79,500.
The data landed at a particularly sensitive moment. With the Federal Open Market Committee (FOMC) set to meet on September 15–16, market participants had already been split on the direction of policy. Under earlier Fed chairs, expectations ahead of FOMC decisions tended to be firmly anchored. This cycle, however, has been marked by a notable absence of forward guidance from Chair Kevin Warsh, compounded by the prospect of internal dissent within the committee, leaving traders with more uncertainty than usual.
Political Pressure and Shifting Probability Odds
The rate-deck picture had been tilting before the jobs report dropped. On Thursday, Fed Governor Christopher Waller publicly stated he would lean toward holding rates steady until further inflation readings arrived. That comment nudged Polymarket's implied probabilities to roughly 60% for a pause and 40% for a 25-basis-point hike. Friday's labor numbers, however, pulled the odds back to an even 50/50 split, underscoring how thin the consensus still is.
The strong data also drew a fresh wave of political intervention. President Donald Trump took to Truth Social to press the Federal Reserve Board for lower rates, writing: "The Fed Board, with its great new leader, must get smart – BE PATRIOTS for a change." He added, "High interest rates put the U.S.A. at a very unfair disadvantage, and I won't allow that to happen!"
While Trump had repeatedly chided former Chair Jerome Powell for refusing to ease policy, Friday marked the first time he directed comparable criticism at Warsh, signaling that the political pressure on the Fed is broadening.
BIP-110 Fork Splits the Network and Spawns Blake2b Bitcoin
Separate from the macro backdrop, the Bitcoin protocol world has been dealing with the aftermath of the BIP-110 user-activated soft fork, which activated on August 7. The activation briefly split the network into two competing chains: one enforcing BIP-110's revised rules and another continuing under the legacy consensus. The BIP-110 branch quickly stalled because miners did not allocate sufficient hash power to extend it.
Advocates of BIP-110 interpreted the miners' reluctance as proof that Bitcoin's mining layer has grown overly centralized. The criticism was sharpened by the fact that no coordinated user-rejected soft fork (URSF) was mounted by the Bitcoin Core camp in response. In practice, just five mining pools command the overwhelming share of the network's hashrate, giving them outsized influence over which chain gets extended and which transactions make it into blocks.
A faction of BIP-110 supporters, led by developer LukeDashjr, opted to carry the BIP-110 chain forward by switching the proof-of-work algorithm to Blake2b. The goal, as outlined by the group, is to open mining to a broader, more decentralized participant base using DATUM gateway technology. The corresponding hard fork went live on August 30.
Under the fork's rules, every address that held SHA-256 Bitcoin prior to August 7 (and possibly after that date) receives an equivalent balance on the new Blake2b variant. As of now, Neoxa is the sole exchange offering a listing for the Blake2b coin. Liquidity remains modest, with the asset trading around $350 against USDC and a spread of roughly 1.1%.