On Friday, alternative cryptocurrencies, or altcoins, led a significant rise in the digital asset market following the alleviation of geopolitical concerns and the release of a strong U.S. jobs report that mitigated recession fears. Notably, the artificial intelligence-focused protocol Bittensor's TAO and Render's RNDR tokens saw impressive gains of 14% and 8%, respectively, within the past 24 hours.
The CoinDesk Computing Index, which monitors a range of AI-centric tokens, emerged as the standout performer within the crypto sectors. Grayscale, a prominent asset manager, made headlines by notably increasing the allocation of TAO in its decentralized AI-focused crypto fund from a mere 3% in July to an impressive 27%.
Additionally, Grayscale made adjustments by adding the Graph (GRT) to its portfolio while replacing Livepeer (LPT). During this period, Bitcoin also experienced a steady increase, reaching a price of $62,300, marking a 2.2% rise for the day. The broader cryptocurrency benchmark, represented by the CoinDesk 20 Index, saw a noteworthy increase of 4.2%, emphasizing that altcoins significantly outperformed Bitcoin. The positive market momentum was largely driven by a stronger-than-anticipated U.S.
labor market report, which revealed that 251,000 jobs were added in September, surpassing the estimated figure of 140,000. Furthermore, the unemployment rate dropped to 4.1%, further alleviating the fears of an imminent recession. This optimistic sentiment was mirrored in the stock market, with the S&P 500 and Nasdaq indexes closing higher at 0.9% and 1.2%, respectively.
Concurrently, the U.S. 10-year Treasury bond yield climbed by 13 basis points, settling just below 4%, while the U.S. dollar index reached its highest mark since mid-August. Post-report, investors are now predominantly anticipating a modest 25 basis point interest rate cut from the Federal Reserve in November. Leena ElDeeb, a research analyst at the digital asset manager 21Shares, highlighted the sensitivity of Bitcoin and other crypto assets to labor market data, given its influence on the Federal Reserve's decisions concerning rate cuts—actions that tend to favor Bitcoin by reducing borrowing costs.
ElDeeb expressed optimism regarding market flows, expecting a recovery following the recent geopolitical disturbances that had previously unsettled the market. Markus Thielen, the founder of 10x Research, asserted that the early October sell-off appears to be at an end, with projections indicating a price increase in the upcoming weeks.
Thielen noted that data from the derivatives market reflects that investors are not currently seeking hedges against further declines, while large liquidation events—similar to those earlier this week—often signify local price bottoms. He remains bullish, contending that as long as the U.S. economy maintains its strength, there remains ample opportunity for both stocks and crypto to ascend. Will Clemente, founder of Reflexivity Research, resonated with this sentiment, pointing out that the Fed's potential easing of monetary policy in a robust economic environment is promising for Bitcoin, especially following the recent leverage flush.
Clemente observed that many investors had exited their positions due to over-leverage or geopolitical concerns. However, with the encouraging jobs report confirming the economy's vigor, he anticipates the initiation of a global easing cycle and a reset of positioning. Despite the uncertainties, Clemente affirmed that Bitcoin continues its stead upward trajectory..