Bitcoin dropped more than 2% on Friday after a stronger-than-expected U.S. jobs report pushed traders to raise their bets on a Federal Reserve interest rate hike. The sell-off pulled BTC from $81,300 down to a low of $78,600 before a partial recovery to around $79,500–$79,800 by late Friday.

The move underscored how sensitive Bitcoin remains to U.S. monetary policy: as a risk asset that has traded in step with tech equities in recent years, BTC tends to sell off when rate expectations rise, since higher rates reduce appetite for volatile holdings.

The Bureau of Labor Statistics reported that nonfarm payrolls rose by 162,000 in August — nearly triple the 55,000 economists had forecast. The unemployment rate held steady at 4.1%, and payroll figures for June and July were revised up by a combined 55,000 jobs.

BREAKING: The US economy adds +162,000 jobs in August, well above expectations of +55,000.

The unemployment rate was 4.1%, in-line with expectations of 4.1%.

July's job number was also revised up by +43,000 jobs and is now positive for the month.

The US job market nearly…

— The Kobeissi Letter (@KobeissiLetter) September 4, 2026 (X post)

The data immediately shifted market expectations. According to CME Group's FedWatch tool, traders now see roughly a 58% chance of a quarter-point rate hike at the September 16 Fed meeting, up from 52% before the report. Polymarket odds moved to a near 50/50 split between a hike and a pause. The divergence between the two platforms reflects how close the market considers the decision to be ahead of the meeting.

President Donald Trump reacted to the data with fresh pressure on the Fed. In a Truth Social post, Trump wrote: "The Fed Board, with its great new leader, must get smart – BE PATRIOTS for a change. High interest rates put the U.S.A. at a very unfair disadvantage, and I won't allow that to happen!"

Fed Governor Christopher Waller had said a day earlier that he favors holding rates steady pending upcoming inflation data. That statement had briefly eased market concerns before Friday's jobs numbers reversed the mood, a reminder that incoming economic prints — including the inflation data Waller cited — remain the key swing factor for rate expectations.

Bitcoin Still Posts Third Straight Weekly Gain

Despite Friday's dip, Bitcoin was still on course for a 3% weekly gain — its third consecutive week of gains. Earlier in the week, BTC touched $82,178.6, its highest level since mid-May.

Crypto analyst Bull Theory posted that Bitcoin surged nearly $20,000 in just 20 days, rising from a low of $62,535 to over $82,300. Bull Theory said this added $390 billion to Bitcoin's market cap and triggered $11.4 billion in leveraged liquidations, calling it "the largest shorts liquidation cascade in entire crypto history."

BREAKING: Bitcoin just gave its highest daily close in nearly 4 months.

Bitcoin surged nearly $20,000 in the last 20 days, from a low of $62,535 to over $82,300.

That move added $390 billion to Bitcoin's market cap and liquidated $11.4 billion worth of leveraged positions.… pic.twitter.com/EEn0i9nHFP

— Bull Theory (@BullTheoryio) September 4, 2026 (X post)

Spot Bitcoin ETFs Record $175 Million in Inflows

Spot Bitcoin ETFs also recorded strong inflows. According to Wu Blockchain, U.S. spot Bitcoin ETFs brought in $175 million in net inflows on September 4, marking three straight days of inflows. BlackRock's IBIT led with $117 million, followed by Fidelity's FBTC with $57.22 million. The sustained inflows suggest institutional demand via ETFs has so far held up despite the macro-driven volatility.

Spot Bitcoin ETFs Take In $175M; Ethereum ETFs Record $26.46M Inflow

According to SoSoValue, U.S. spot Bitcoin ETFs recorded $175 million in net inflows on September 4 (ET), marking their third consecutive day of inflows. BlackRock's IBIT led with $117 million, followed by… pic.twitter.com/dNOGJAVUw5

— Wu Blockchain (@WuBlockchain) September 5, 2026 (X post)

SEC Chair Weighs In on Crypto Regulation

SEC Chair Paul Atkins said he expects the Senate to vote on the Clarity Act on September 15 and called on policymakers to pass it before month-end. Atkins also said the SEC is preparing its own crypto legislation to work alongside the Clarity Act. The Senate vote falls just one day before the Fed's September 16 meeting, putting regulatory and monetary policy decisions for the crypto market in the same week.

The Clarity Act has stalled in Congress over disagreements on stablecoin yield payments and rules around policymakers trading crypto.

Strategy, the top corporate Bitcoin holder, rallied nearly 18% in Thursday's session.