Hotter US May Jobs Data Spurs Fresh Rate-Hike Pricing; Crypto Market Value Sheds $390B

The US economy added 172,000 jobs in May, about twice what economists had forecast, prompting investors to rethink the Federal Reserve path from potential cuts to the possibility of additional tightening. The employment report, released June 5, topped expectations for roughly 85,000 nonfarm payroll gains. The unemployment rate was unchanged at 4.3%, and prior months’ payroll figures were revised higher. Rate expectations shifted quickly. CME FedWatch showed the implied probability of a 25-basis-point rate hike by December 2026 rising to about 68%, from 52% before the data. Two-year Treasury yields climbed around 9 to 13 basis points, ending near 4.13% to 4.17%. Risk assets weakened alongside the jump in yields. Total digital-asset market capitalization fell about $390 billion in the week around the release. Bitcoin traded back into a $61,000 to $62,000 range after the selloff, and Ether also posted sizable losses. Higher Treasury yields can pressure crypto by improving the relative appeal of government bonds. As guaranteed returns rise, capital often shifts away from more speculative assets, raising the opportunity cost of holding Bitcoin when two-year Treasuries yield above 4%. Similar patterns surfaced in the 2022–2023 hiking cycle, when Bitcoin fell from an all-time high near $69,000 to below $16,000. For investors, tighter monetary conditions typically lead institutions to trim exposure to high-volatility assets, while retail traders can face increased margin and financing costs as benchmark rates move higher.