Risk-on Sentiment Sending Bitcoin, Ether, & Gold Higher as President Biden Declares ‘We Can’t Let Up’
While the S&P 500 hit a new record high after the disappointing jobs report, the market is now expecting Bitcoin to make its way past $70k and Ether to get ready to hit several new levels.
President Joe Biden called on lawmakers this week to approve his massive infrastructure and jobs package following the disappointing jobs report.
While economists were forecasting 1 million new jobs and an unemployment rate of 5.8%, the actual results were a huge letdown, with nonfarm payrolls increasing by only 266,000 in April and the unemployment rate rising to 6.1% even as states began relaxing coronavirus restrictions.
“We can’t let up. This jobs report makes that clear. We’ve got too much work to do,” Biden said in remarks at the White House. “We have to build back better.”
Meanwhile, Republicans and business owners are complaining that federal unemployment benefits are preventing laid-off workers from taking new jobs. Congress added $300 per week to state benefits.
“Today’s disappointing jobs report is a result of the federal government incentivizing people to stay at home and seek enhanced unemployment benefits rather than finding a job, even as employers are actively looking for more workers,” Sen. Kevin Cramer (R-N.D.) said in a statement.
Biden’s proposed American Jobs Plan calls for spending over $2 trillion to rebuild the roads, bridges, and airports along with the long-term care for the elderly and the disabled. His other proposal, the American Families Plan, is spending nearly as much to provide cheaper child care, free pre-kindergarten, and paid family and medical leave.
Biden’s dovish call and disappointing employment report pushed the S&P 500 to a new record high. While the US dollar index continues its way downwards to 90, gold is finally showing some strength, aiming for $1,850 per ounce.
Bitcoin also surged to $59,400, and although it is yet to be seen if it will continue to new highs, the market is calling for the momentum to take us to $70k. Ether is also keeping the bulls around $3,550, ready to double here.
— Zhu Su (@zhusu) May 8, 2021
Amidst the risk-on sentiment, the Fed warned of the increasing threats these rising asset prices are posing to the financial system. In its semiannual Financial Stability Report, the central bank said future dangers are rising, in particular, should the aggressive run on stocks tail off.
“Asset prices may be vulnerable to significant declines should risk appetite fall,” is the central bank’s wonderful judgment on the market.
As for crypto, SEC’s new commissioner Gary Gensler said more protections are needed amidst the rise in “crypto tokens.” “We need to update and freshen our rules,” he said.
Cryptocurrencies were especially ripe for regulation to help eliminate fraud, manipulation, and other bad actors, he said.
“Bringing investment protection to that market is relevant if this is going to continue, and it brings confidence and trust to the overall markets.”