The U.S. labor market’s resilience in August has ignited optimism in the cryptocurrency sector, with industry analysts predicting a potential upswing for Bitcoin (CRYPTO: BTC) and other digital assets.

According to the government jobs report released Friday, the U.S. economy added 142,000 nonfarm payrolls in August, surpassing July’s downwardly revised 89,000 but falling short of the 160,000 consensus estimate.

This data has prompted experts to anticipate a more dovish approach from the Federal Reserve, including possible interest rate cuts that could benefit cryptocurrencies.

In a note sent to Benzinga, Leena ElDeeb, research analyst at crypto ETPs issuer 21Shares, said the labor market results acted as a moment of truth for risk-on assets like Bitcoin.

“With a slightly improving unemployment rate, investors traded positively, pricing in a looser monetary policy on Sept. 18,” ElDeeb said.

ElDeeb emphasized that while a rate cut would be favorable for risk-on assets like Bitcoin, it’s not the sole catalyst for potential price appreciation.

She pointed to global central bank liquidity as a key factor, noting, “Historically, Bitcoin tends to bottom out shortly before global M2 reaches its low, followed by a rapid price surge that often outpaces liquidity growth.”

Also Read: UK Crypto Firms Face 87% Rejection Rate In FCA Registration Process

Zach Pandl, head of research at Grayscale Investments told Benzinga that the August jobs report hit the sweet spot for Bitcoin, with the labor market slowed, which will allow the Fed to cut rates, but there are no signs of recession.

Pandl further elaborated on the factors contributing to his optimistic view for the remainder of the year, citing “the favorable macro backdrop, the election year focus on large U.S. budget deficits, and growing institutional adoption through the new spot crypto ETPs.”

The experts highlighted additional elements that could drive cryptocurrency performance in the coming months.

ElDeeb noted the Federal Reserve’s recent $2 billion addition to its balance sheet, potentially signaling increased liquidity. She also mentioned the potential impact of Bitcoin spot ETFs in major financial markets, which could amplify the effect of these macroeconomic trends.

Pandl suggested that the crypto market’s relatively flat performance over the summer could be poised for a turnaround, given the current economic conditions and increasing institutional interest in the space.

These expert insights and predictions are likely to be hot topics of discussion at the upcoming Benzinga Future of Digital Assets event on Nov. 19.

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