Altcoins Surge As Geopolitical Concerns Ease And U.S. Jobs Report Exceeds Expectations

According to CoinDesk, alternative cryptocurrencies, or altcoins, led the digital asset market's rise on Friday following the easing of geopolitical concerns and a robust U.S. jobs report that alleviated recession fears. Artificial intelligence-focused protocol Bittensor's TAO and Render's RNDR tokens saw significant gains of 14% and 8% respectively over the past 24 hours. The CoinDesk Computing Index, which tracks several AI-related tokens, emerged as the top performer among crypto sectors. Grayscale, an asset manager, notably increased the weight of TAO in its decentralized AI-focused crypto fund to 27% from 3% in July, while also adding the Graph (GRT) and replacing Livepeer (LPT). Bitcoin also experienced a steady climb during U.S. trading hours, reaching $62,300, up 2.2% for the day. The broader market crypto benchmark, the CoinDesk 20 Index, rose 4.2% during the same period, highlighting that altcoins outperformed Bitcoin. The positive movement in the market was likely influenced by a stronger-than-expected U.S. labor market report, which added 251,000 jobs in September, surpassing estimates of 140,000. The unemployment rate decreased to 4.1%, easing concerns of an imminent recession. This positive sentiment extended to the stock market, with the S&P 500 and Nasdaq indexes closing 0.9% and 1.2% higher, respectively. The U.S. 10-year Treasury bond yield increased by 13 basis points to just below 4%, and the U.S. dollar index reached its highest level since mid-August. Following the report, investors now largely anticipate a smaller 25 basis point interest rate cut from the Federal Reserve in November. Leena ElDeeb, a research analyst at digital asset manager 21Shares, noted that Bitcoin and other crypto assets are sensitive to labor market data as it influences the Fed’s decisions on rate cuts, which positively impact Bitcoin by lowering borrowing costs. ElDeeb expects market flows to recover following the recent geopolitical tensions that had unsettled the market. Markus Thielen, founder of 10x Research, suggested that the early October sell-off is likely over, with prices expected to rise in the coming weeks. Thielen added that derivatives market data indicate investors are not seeking hedges against further downside, and large liquidation cascades, as seen earlier in the week, often mark local price bottoms. Thielen believes that as long as the U.S. economy remains strong, both stocks and crypto have room to grow. Will Clemente, founder of Reflexivity Research, echoed this sentiment, stating that the Fed easing monetary policy in a strong economy bodes well for Bitcoin following the recent leverage flush. Clemente noted that many investors exited their positions due to over-leverage or geopolitical concerns but now, with the strong jobs report, the economy is confirmed to be robust, initiating a global easing cycle and a positioning reset. Clemente added that despite worries, Bitcoin continues to rise steadily.