Last night's non-farm report was even more exciting than the 'double kill' in the cryptocurrency contract market, with a shiny surface concealing the secrets of wealth flow for the second half of the year.
As a cryptocurrency analyst, I stayed up late waiting for the moment the data was released, and couldn't help but exclaim that this is simply a meticulously orchestrated macroeconomic drama. If you only see the 'strong' headline employment data and think the Federal Reserve will continue its hawkish stance, you might miss the most important signals.
This report can be described as a 'textbook-level' entanglement: 256,000 new jobs, far exceeding the expected 160,000, making the economy seem incredibly hot; but upon closer inspection, the unemployment rate remains at 4.1%, and employment in small and medium-sized enterprises continues to be weak, creating a sense of division that is both amusing and frustrating.
01 The Glamorous Surface: The 'Face Project' of Non-Farm Data
First, let's look at the 'face' of this report, which is indeed quite glamorous. In December, non-farm payrolls added 256,000 jobs, far exceeding the market expectation of 160,000, as if the U.S. economy is still running at high speed.
At the moment the data was released, the market reflexively reacted: the U.S. dollar index jumped about 90 points, approaching the 110 mark; the yield on the U.S. 10-year Treasury rose to 4.776%, a new high since November 2023. From a traditional perspective, this should be seen as an acknowledgment of economic 'resilience.'
By industry, retail, leisure and hospitality, and professional business services contributed the most, with the service sector overall adding 231,000 jobs. Government employment also increased by 33,000. At first glance, various sectors seem to be joyfully hiring.
However, the market's immediate reaction is often just a reflex; the real story lies in the details.
02 Substance Analysis: The 'Skinny Reality' Behind the Data
Peeling back the glamorous exterior, the 'substance' of this report reveals entirely different information.
Firstly, the decrease in the unemployment rate is not completely positive. Although the unemployment rate fell slightly from 4.2% to 4.1%, the labor force participation rate remained steady at 62.5%, indicating limited slack in the labor market. More critically, the revisions to the previous two months' data reveal a different story: the new job additions for October and November were revised down by 8,000.
Secondly, industry differentiation has intensified. A key signal is: U.S. small businesses (with fewer than 50 employees) have had negative job additions for three consecutive months, with a decrease of 166,000 in November, while large enterprises with over 500 employees have had positive job additions for ten consecutive months. This pattern of 'large enterprises absorbing jobs while small and medium enterprises are under pressure' reflects the differentiated impact of the high interest rate environment on the real economy.
The most critical point is the slowdown in wage growth. In December, average hourly wages increased by 0.3% month-on-month and 3.9% year-on-year, both slightly weaker than previous values. The moderation in wage growth is the inflation cooling signal that the Federal Reserve is most eager to see.
03 The Federal Reserve's 'Dilemma'
This contradictory report has put the Federal Reserve in a typical 'dilemma.'
On one hand, strong employment data provides a basis for the Federal Reserve to maintain high interest rates. The market's expectation probability for maintaining interest rates unchanged in January 2026 rose to 75.6%, a significant increase from November. The seemingly 'hot' job market has given the Fed the confidence to continue its 'hawkish' stance.
On the other hand, the hidden worries of structural indicators leave room for interest rate cuts. The real challenge facing the Federal Reserve is to control inflation while avoiding excessive harm to small and medium enterprises. This delicate balancing act tests the wisdom of policymakers.
The interest rate futures market has already begun pricing: the expected cumulative rate cuts for 2025 have decreased from 41 basis points to 33 basis points. The market is reassessing the Fed's policy path, which is much more complex than most people think.
04 The Real Impact on the Cryptocurrency Market
For cryptocurrency investors, understanding the potential impact of this report on liquidity is crucial.
Within the traditional framework, strong employment data would raise interest rate expectations and suppress risk assets. Indeed, after the non-farm data was released, spot gold briefly plunged by $15. But the cryptocurrency market has shown unique resilience.
Bitcoin staged a typical 'double kill' after the non-farm data release: it first surged to around $88,000, then quickly fell back, ultimately oscillating within a narrow range. This box movement with a ceiling above and a floor below reflects the market's inability to form a consistent expectation under conflicting signals.
The underlying logic has changed: the negative correlation between gold and real interest rates will significantly weaken in 2025. This change also applies to cryptocurrencies. Central bank purchases of gold (global central bank gold reserves increased by 822 tons in the first three quarters of 2025) provide underlying support for gold, while the underlying support for cryptocurrencies comes from their unique value storage properties.
More importantly, the market is beginning to realize that the Federal Reserve's policy is not a black-and-white choice. Even if the Fed maintains high interest rates, as long as inflation is under control, real interest rates will not rise indefinitely, and the pressure on risk assets will also be limited.
05 Future Outlook and Investment Strategies
Looking ahead, three major variables will determine the market direction.
Firstly, the clarification of the Fed's policy path. If future non-farm data continues to exhibit the characteristics of 'strong overall, weak structure,' the Fed may adopt a 'gradual rate cut' strategy, maintaining high rates but slowing the pace of rate hikes. This environment is actually relatively friendly to cryptocurrencies.
Secondly, the evolution of geopolitical risks. The Russia-Ukraine conflict is at a stalemate, the Red Sea shipping crisis is driving up global logistics costs, and the Middle East situation is fluctuating. These factors collectively stimulate demand for alternative assets. The safe-haven properties of cryptocurrencies are similar to those of gold.
Thirdly, the global 'de-dollarization' process. Against this backdrop, the revaluation of gold as a reserve asset has provided underlying support for mid-to-long-term prices. Cryptocurrencies represent a more thorough attempt at reconstructing the monetary system.
The core advice for investors is: do not be misled by surface data, but rather see the deeper trends. The structural differentiation in the job market means the economy is not as strong as the surface data suggests, which actually creates conditions for the Fed to shift to an easing policy sooner.
The future market trend will depend on how these contradictions are resolved. Subsequent speeches by Federal Reserve officials, the further trajectory of inflation data, and any policies that the Trump administration may introduce will all become key variables that break the current balance. As smart investors, we need to be patient and identify the real signals amid data noise.
Opportunities in the cryptocurrency space are always reserved for those who see deeper than the candlestick charts and understand more than the general public.
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