Ethereum News Today: Ethereum Soars as Labor Market Doubts Fuel Crypto Divergence

The U.S. jobs report for August is expected to reflect a cooling labor market, with economists forecasting a modest addition of 75,000 to 80,000 jobs, down from the weak July performance of 73,000 jobs added. This data follows significant downward revisions for May and June, which collectively reduced job gains by 250,000, casting doubt on the strength of the labor market. The latest report will be closely watched for further evidence of a slowdown, with a 96.6% probability that the Federal Reserve will cut interest rates by 25 basis points at its September meeting, according to the CME Group’s FedWatch tool [6].

The labor market has shown signs of strain, with the number of unemployed individuals now surpassing the number of available jobs for the first time since 2021. Analysts are concerned that the labor market is entering a phase of reduced hiring and limited opportunities, exacerbated by the Trump administration’s policies and the lingering effects of the pandemic. The uncertainty has led to a tightening of hiring practices among employers, who are increasingly cautious about expanding their workforce amid economic volatility [4].

In parallel, the release of the jobs report has raised concerns over the credibility of economic data. President Trump’s recent dismissal of the Bureau of Labor Statistics commissioner and his criticism of the July report have sparked fears of political interference in the data collection process. E.J. Antoni, Trump’s nominee for the BLS commissioner, has drawn controversy for his association with conservative think tanks, raising concerns about potential bias in the accuracy and impartiality of future reports. These developments add a layer of uncertainty to the labor market data, potentially complicating the Fed’s decision-making process regarding rate cuts [6].

Meanwhile, the crypto market has shown mixed reactions ahead of the jobs report. Bitcoin briefly rebounded above $112,000, liquidating short positions and attracting bullish sentiment. Analysts suggest that the release of the jobs data could trigger further volatility, particularly if the numbers confirm a slowing labor market and reinforce expectations for Fed rate cuts. In contrast, Ethereum has shown stronger momentum, with institutional flows favoring ETH over BTC. Ethereum ETFs attracted $4 billion in inflows during August, while Bitcoin ETFs saw $751 million in outflows. This institutional shift has supported ETH’s performance, with Ethereum rising 25% over the past month compared to Bitcoin’s 6% decline [7].

Ethereum’s outperformance has also been attributed to its growing role in decentralized finance (DeFi) and its staking yield potential. Ethereum currently has a staking rate of 29.4% with annual yields ranging from 3% to 5%, attracting institutional investors seeking steady returns. Analysts like Tom Lee of Fundstrat have speculated that Ethereum could reach $12,000 to $22,000 if it recovers to historical price ratios relative to Bitcoin. More optimistically, Lee has projected a $62,000 target if Ethereum replaces traditional financial infrastructure, pushing the BTC/ETH ratio to as high as 0.25 [2].

The interplay between macroeconomic data and crypto markets remains a key factor in shaping price dynamics. While Bitcoin has traditionally been seen as a hedge against inflation, Ethereum’s utility-driven appeal—rooted in its role in DeFi and smart contracts—has created a divergence in how the two assets respond to macroeconomic signals. This divergence is further amplified by the rise in decentralized exchange (DEX) activity, which has contributed to Ethereum’s stronger performance relative to Bitcoin during periods of market stress. DEX volume for Ethereum reached an all-time high of $139.63 billion in August, reinforcing the network’s growing infrastructure and reducing its historical correlation with Bitcoin [7].

As investors await the August jobs report, the focus remains on whether the data will confirm a broader slowdown in hiring or simply reflect a temporary lull. A weaker-than-expected report would likely accelerate expectations for Fed rate cuts and provide a tailwind for risk-on assets like Bitcoin and Ethereum. Conversely, stronger-than-expected job gains could delay rate cuts and weigh on crypto prices. The market’s reaction will depend on how the data aligns with existing expectations and whether it signals a new phase in the labor market’s trajectory.

Source:

[1] title1 (https://cointelegraph.com/news/bitcoin-analysts-see-massive-move-btc-price-regains-112k)

[2] title2 (https://finance.yahoo.com/news/tom-lee-ethereum-could-reach-203041720.html)

[3] title4 (https://www.cbsnews.com/news/august-jobs-report-labor-market-bureau-labor-statistics/)

[4] title5 (https://www.cnn.com/2025/09/04/economy/us-jobs-report-august-preview)

[5] title6 (https://www.cnbc.com/2025/09/04/the-august-jobs-report-could-confirm-a-slowing-labor-market-but-will-stocks-care.html)

[6] title7 (https://powerdrill.ai/blog/btc-eth-trends-and-movements)