The U.S. job market outperformed expectations in December, with 256,000 jobs added compared to the forecasted 160,000.

The cryptocurrency market has faced significant losses recently, as unexpectedly strong economic data drove interest rates higher, dampening expectations for further Federal Reserve rate cuts.

In December, the U.S. job market exceeded expectations, with job growth surpassing forecasts and the unemployment rate dropping unexpectedly. According to the Bureau of Labor Statistics, the economy added 256,000 jobs in December, beating the projected 160,000 and rising from a revised 212,000 in November (originally reported as 227,000).

The unemployment rate decreased to 4.1% in December, compared to the anticipated 4.2% and the previous month’s 4.2%.

In response to the report, Bitcoin (BTC) fell by more than 2%, dropping to $92,800 despite an initial attempt to recover.

The strong jobs report comes after a series of recent economic data points that caused broad market pullbacks across various asset classes. These reports have led investors to reduce their expectations of continued rate cuts from the Federal Reserve in 2025, resulting in a major selloff in the cryptocurrency market. Bitcoin, which had been near $103,000 on Monday, dropped below $92,000 by Thursday, with major altcoins seeing even larger declines in percentage terms.

Looking at traditional markets, U.S. stock index futures were down about 1% following the report. The bond market showed the biggest reaction, with the 10-year Treasury yield rising by nine basis points to 4.78%. The dollar index surged by 0.6%, and gold prices dipped slightly to below $2,700 per ounce.

In response to the data, traders have lowered their odds for further rate cuts in 2025. The probability of a rate cut in March dropped to 28% from 41% before the report, while the likelihood of a May rate cut decreased from 44% to 34%, according to CME FedWatch.

In other key details, average hourly earnings rose by 0.3% in December, in line with expectations but lower than November’s 0.4% increase. On a year-over-year basis, earnings grew by 3.9%, slightly missing the forecasted 4% and down from November’s 4%.

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