Bitcoin reclaimed $87,000 early Friday for the first time since Sept. 23, driven by a weak September jobs report and a new SEC proposal that would let investment advisers hold crypto assets directly. The rally caught short sellers off guard, wiping out $142 million in leveraged bitcoin positions within 24 hours.
Bitcoin reclaimed $87,000 on Friday morning, marking its first trip above that level since Sept. 23. Coinglass data showed $142 million in bitcoin short bets were liquidated against about $29 million in longs over the prior 24 hours, up sharply from roughly $35 million in liquidations a day earlier.
Bitcoin's Overnight Climb to $87,219
According to Bitstamp data, the price held in the $84,500 to $85,000 range until late Thursday. An hour before midnight, bitcoin began climbing, rising to $85,500 before a sharp rally added more than $1,000 in under 30 minutes to reach $86,780.
A brief stretch of volatility followed, with the price swinging between $85,500 and $86,000 before another climb pushed bitcoin to an intraday peak of $87,219. A rejection at $87,000 sent it lower, but it found support above $85,000, leaving bitcoin with a daily gain of nearly 1% at a recent price of $85,188.
Weak Payrolls Shift Rate Expectations
The rally coincided with September nonfarm payrolls data showing employment grew by just 29,000 jobs, well below the 90,000 expected. The unemployment rate rose to 4.2%. The downside surprise triggered an immediate pullback in the U.S. Dollar Index and Treasury yields as markets repriced expectations for upcoming Federal Reserve decisions.
A weakening labor market gives the Fed justification to accelerate monetary easing. Lower benchmark interest rates reduce the opportunity cost of holding non-yielding, fixed-supply assets such as bitcoin, and the softer dollar that followed the report adds a further tailwind given the asset's historical inverse correlation with the greenback.
SEC Opens Door to Direct Crypto Custody
Beyond the jobs data, traders were also digesting a new SEC proposal on how investment advisers and funds can hold digital assets under federal securities laws. The agency acknowledged that prior custody frameworks created a compliance vacuum, since traditional custodians were largely unavailable or unwilling to hold crypto assets.
The proposal would let advisers and funds hold client crypto directly when no qualified custodian is available, subject to strict guardrails, and the SEC opened a 60-day public comment period following the proposal's official publication in the Federal Register. Because fiduciaries cannot allocate capital without compliance safeguards, the targeted custody proposal effectively opens the door to institutional participation even without action from Congress.
Source: Bitcoin News
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