The case for Federal Reserve interest rate increases strengthens following impressive job figures. The yield on 10-year Treasury bonds surged by 6 basis points to 4.54% shortly after the May jobs report exceeded economists’ expectations. The two-year yield, more responsive to the Fed’s monetary policy, rose by 7 basis points to 4.12%, with the probability of one or more rate hikes by year-end climbing to approximately 80%. In addition to the addition of 172,000 jobs in May, upward revisions for April and March totaled 93,000, bringing the total job additions to 565,000 over the past three months. U.S. stock indices, already under pressure, fell further as speculation about imminent rate hikes gained traction. Nasdaq futures dropped by 1.3%, while the S&P 500 fell by 0.6%. Bitcoin is trading at $61,800, down nearly 1% in the last 24 hours.

Bitcoin Experiences Decline Following Strong U.S. Jobs Data

The U.S. economy added 172,000 jobs in May, significantly surpassing economists’ predictions of 85,000. The initial job gain for April was revised dramatically from 115,000 to 179,000. The unemployment rate remained steady at 4.3%, matching expectations. Following this robust data, Bitcoin’s price has dipped further to $61,800.

Zcash Faces 44% Drop Amid Spot Selling, but Futures Open Interest Hits All-Time High

Zcash has plummeted 44% within 24 hours, now trading around $298. Market structure analysis indicates that this decline was primarily driven by spot selling rather than a leveraged liquidation event. ZEC experienced approximately $118 million in forced liquidations, which is minor for a token that nearly halved in value. Meanwhile, Bitcoin and Ethereum saw minor drops of a few percent during the same timeframe but faced greater liquidations at $335 million and $278 million, respectively. Traders rapidly opened positions in anticipation of the downturn, resulting in a surge of new short interest. Furthermore, open interest in ZEC reached a record high on Thursday, surpassing the peak observed in late May.

Earlier, Shielded Labs, a nonprofit working on the privacy token system, revealed a significant vulnerability within Zcash’s (ZEC) Orchard privacy pool, which could have jeopardized the token’s supply integrity. If exploited, this flaw could have permitted an attacker to generate an unlimited number of counterfeit ZEC tokens without detection. «Imagine someone secretly accessing the Federal Reserve’s dollar printing press; in this scenario, even the Fed wouldn’t be able to recognize that these additional dollars had been printed,» commented Omkar Godbole. Notably, the vulnerability was identified with assistance from Anthropic’s newly released Opus 4.8 AI model, raising challenging issues for the entire cryptocurrency industry. More updates on this situation are forthcoming.

Bitcoin (BTC) has largely relinquished yesterday’s modest recovery, reverting to $61,900 during the U.S. morning session, reflecting a 0.8% decline in the last 24 hours. The U.S. Nonfarm Payroll Report for May is expected to be released shortly. Although the interest rate outlook has taken a backseat to other concerns amid this week’s cryptocurrency price decline, this morning’s data will still hold significant importance. Markets have shifted from anticipating rate cuts this year to expecting rate hikes as inflation has escalated, partly due to soaring energy costs. A substantial downturn in the labor market might be the only factor that could reverse this outlook on interest rates. Should the interest rate expectations take another 180-degree turn back to cuts, it could provide a much-needed boost to the cryptocurrency markets.