December saw a significant job increase in the U.S., with 256,000 positions added, far surpassing the 160,000 estimate.

Crypto markets have experienced significant declines recently, as stronger-than-expected economic data caused interest rates to surge and raised doubts about the Federal Reserve’s ongoing plans for monetary easing.

The U.S. job market showed notable strength in December, surpassing economists’ predictions and leading to an unexpected drop in the unemployment rate. According to the Bureau of Labor Statistics, the U.S. economy added 256,000 jobs last month, far exceeding the forecasted 160,000, and marking an increase from November’s revised figure of 212,000 jobs (previously reported as 227,000).

The unemployment rate fell to 4.1% in December, better than the expected 4.2% and down from November’s 4.2%.

Bitcoin (BTC), which had been attempting to recover from significant losses earlier in the week, saw a decline of over 2% immediately following the jobs report, dipping to $92,800.

These employment figures followed a series of other economic reports that triggered a broad market retreat, with investors scaling back expectations for continued rate cuts by the Federal Reserve in 2025. The crypto market, which had previously been on a bullish trajectory, felt the brunt of the selloff, with Bitcoin dropping from nearly $103,000 on Monday to below $92,000 by Thursday. Altcoins experienced even greater declines on a percentage basis.

Traditional markets also saw sharp reactions to the data, with U.S. stock index futures falling by approximately 1% following the jobs report. The most significant impact was in the bond market, where the 10-year Treasury yield rose by nine basis points to 4.78%. The dollar index surged 0.6%, and gold prices saw a modest drop, falling just below $2,700 per ounce.

Traders are adjusting their expectations for Federal Reserve rate cuts in 2025, with the likelihood of a March rate cut dropping to 28% from 41% before the report. The probability of a rate cut in May has decreased to 34%, down from 44% previously, according to CME FedWatch.

Additionally, average hourly earnings rose by 0.3% in December, in line with expectations but lower than November’s 0.4% growth. On a year-over-year basis, hourly earnings increased by 3.9%, slightly under the expected 4% and lower than November’s 4% increase.