Recent data from the US economy is signaling initial warning signs for risky assets and the cryptocurrency market. The reported employment figures indicate that household incomes may weaken towards 2026.
This development could particularly reduce individual investor entry into volatile assets like crypto. In the short term, it indicates a demand issue rather than a structural crisis.
US Labor Data: Disposable Income Growth is Slowing
The latest Non-Farm Payroll report showed a moderate increase in employment and a rise in the unemployment rate. Wage growth has also slowed, indicating a loss of momentum in household incomes.
Disposable income plays a critical role in cryptocurrency usage. Individual investors generally invest in risky assets not with leverage, but with leftover cash.
When salaries stagnate and job security decreases, households first cut back on discretionary spending. Speculative investments generally fall into this category.
In the altcoin market, the role of individual investors is much larger compared to Bitcoin. Small tokens are often dependent on individual capital seeking high returns.
In contrast, Bitcoin attracts the interest of institutional funds, ETFs, and long-term investors. This creates deeper liquidity and a stronger downward resistance.
When Americans have less money to invest, altcoins are the first to be affected. As liquidity rapidly dries up, price declines can last longer.
Individual investors may find themselves forced to close positions to meet their needs. This selling pressure has a greater impact on tokens with smaller market capitalizations.
Asset prices can rise even if incomes weaken. This possibility strengthens especially if monetary policy becomes supportive.
The cooling labor market allows room for interest rate cuts by the U.S. Federal Reserve (Fed). Lower interest rates may support asset prices more through liquidity rather than household demand.
This difference is significant from the perspective of the cryptocurrency market. Rises associated with liquidity are generally more fragile and remain more sensitive to macro shocks.
Institutional Investors Are Facing Challenges from Japan
The weak individual demand in the market is only part of the picture. It is noteworthy that institutional investors are also behaving cautiously.
The potential interest rate hikes by Japan's Central Bank (BoJ) pose an important risk for global liquidity conditions. The risk of disruption in the yen carry trade, which has supported risky assets for years, is on the agenda.
When borrowing costs rise in Japan, institutions tend to reduce their positions globally. Crypto, stock, and credit markets may be affected by this development.
The main risk here is not a collapse, but weak demand. The slowdown in income growth in the workforce may pull individual investors to the sidelines. As liquidity tightens, institutional investors may also shift to a wait-and-see mode.
In such an environment, altcoins remain the most vulnerable side. Bitcoin, on the other hand, is in a better position to cope with potential slowdowns.
Currently, a transition period is taking place in the cryptocurrency market where balances are changing. A period is entering where macro developments are being focused on rather than individual movements.
This change could shape the early months of 2026.
