Digital Asset News host breaks down the September jobs report and its implications for Bitcoin and crypto markets
A solo presentation by the Digital Asset News host covering macroeconomic data, stablecoin adoption, and crypto market developments.
Summary
The Digital Asset News host opens with the September jobs report, which showed only 29,000 new non-farm payroll jobs — well below the 84,000 forecast — and an unemployment rate rise to 4.2%. He argues this bad economic news is good for crypto markets because it sharply reduced the probability of the Federal Reserve raising rates at its upcoming October meeting, shifting odds from 60/40 in favour of a raise to 80/20 against. He then pivots to stablecoin adoption, highlighting Federal Reserve data showing stablecoin issuers have accumulated over $200 billion in US Treasury holdings over five years, which he frames as a meaningful offset to China selling US Treasuries. He covers real-world stablecoin utility through a Lloyds and Visa cross-border settlement pilot using USDC, and Fiserv's launch of the Rough Rider coin on Solana for North Dakota banks. The session closes with a live Q&A touching on the Midnight privacy protocol, a $3.8 million hack of the Near Intent protocol, and general market sentiment.
Key Takeaways
FULL TRANSCRIPT
September Jobs Report: Bad News for the Economy, Good News for Crypto
Well, everybody, it's come to that time. Good news is bad news. Bad news is good. What we're taking a look at today is the jobs report, which I'm sure most of you have already heard. We've been talking about this and I'm sure it's been making the rounds on X and all the different publications. But this is why you start to see a little bit of a push. The labor market has faltered in September as jobs increased by only 29,000, and the unemployment rate rose to 4.2%.
Now, in normal terms, if we weren't in the market, this would be awful. This would be awful because we're not seeing our fellow countrymen and our people actually being picked up for jobs. The unemployment rate is actually increasing, so people are losing their jobs. But the market itself is not the economy, and the economy is not necessarily the markets. And what we see with that — people are like, "This is great news because that means the Fed will potentially not raise rates."
So here's what we have. Non-farm payrolls rose by just 29,000 in September, well below the 84,000 forecast. Markets rose off the report as traders priced in a high probability the Fed will not raise rates. Wage growth slipped to its lowest since May, and job gains were concentrated in healthcare, construction, and manufacturing. So if you want to see where things are going, construction and manufacturing are a big move — especially with all these AI data centers, especially with AI itself, and all the different places that are actually being built. Construction and manufacturing are big ones, and healthcare of course, because we have an aging population. Healthcare is going to probably go up and to the right for quite some time.
We can see here from MarketWatch the unemployment report. Previously we had raised 162,000 jobs just a month ago. The expectation was 84,000. We came in well, well, well below that — 29,000. The unemployment rate rose to 4.2%, and there's a big thing around hourly earnings. I just don't believe that earnings are actually being kept up with the rate of inflation. Meaning that over the last 10 to 20 years, however you want to take a look at it, the amount of money being paid to the hourly worker has not kept up with the rapid pace of inflation. We've actually been going up and to the right, especially with gas prices.
So because of that, what this means for the Fed is they're like, "Okay, we have all these problems." They have a dual mandate. The dual mandate is to keep inflation around 2% — which they are unfortunately failing at — and the second part is to keep the economy stimulated as far as employment goes. When that gets cut, they have to take a step back and say, "Well, maybe we don't raise rates for the next meeting," which will be around October 28th, roughly three to three and a half weeks away.
So we're now at what was a 60/40 split for a raise, because the current target rate is 374 basis points. Just yesterday, we were at a 60/40 split where they were going to actually raise rates. Now it's an 80/20 split saying they will probably cool down and will not raise rates. And because of that, the market — especially ours — is doing quite well. We just passed over a three trillion dollar market cap. Congratulations to everybody who was doing the things they were supposed to do, which was to buy in the bear market, like we talked about.
Stablecoins Offsetting China's Treasury Selloff
Now we have to start to take a look at what is going on globally. This was a pretty good piece. Matt Hogan: the Fed is citing stablecoin demand as an offset for China selling Treasuries. Now, if you don't know, China keeps a lot of our debt by buying Treasuries and bonds. Because of that, it kind of reaffirms America's status as essentially the global currency reserve. When they sell off — not so good.
How great is it, though, that stablecoins are actually stepping in here. This is what President Trump did say — and I know when I say the word Trump everybody flips out, but just calm down. He did say he likes stablecoins, especially as they are actually able to increase the power of the dollar. And I think even he knew it. If these stablecoins — specifically Tether and USDC from Circle — are buying up a ton of Treasuries because they have to peg themselves to something, that would be the way to go.
This is from the Federal Reserve Bank of San Francisco. A new economic letter highlights that stablecoin issuers' Treasury holdings have grown more than $200 billion in five years. So it's a good thing that they were actually buying up all those Treasuries as China sells them off. And this was our thesis for quite some time. We thought that payments will be a big thing. Tokenization of real-world assets — that's going to be kind of the narrative moving forward, especially in this cycle.
So we always take a look at Visa on analytics because Visa, the largest payments network globally, is tracking these numbers and going, "Yeah, this is what we should be tracking because that is the future." And they were 100% correct. We can just see that. Stablecoin transaction count — pretty much up and to the right since 2020. Good for them. And you just see that stablecoins are going to be the next big thing for payments. Transaction volume — same thing, up and to the right.
Tether vs. USDC: Who's Winning the Stablecoin Race
This is why we take a look at this, because there are really two winners right here. It's either Tether or USDC. Tether's transaction volume by stablecoin is $270 billion in September. The next closest was USDC at $49 billion — still pretty good, but nowhere near Tether. And PayPal is number three at $382 million. So when people start to cite these stablecoins, you have to take a look at which ones are winning. Right now it's just USDC and Tether.
So the question you have to ask yourself is: which rails are being used by Tether and USDC primarily? And it's been Base for the last 12 months, along with Binance, Ethereum, Solana, and Tron. Base is creeping in there, and you've also got Polygon as well. These are the big things. And of course XRP holders will say, "What about XRP?" Hey, XRP has got its own rails and they're working with HSBC and those banks, and it'll probably be a good winner. I personally don't own any XRP, but that's where things are going. And I think this is going to be the next big movement for this cycle.
Lloyds and Visa Settle $750,000 Using USDC in Live Cross-Border Pilot
Moving into crypto moving into banking — Lloyds and Visa just did a little stopover to see if this would work, and they settled $750,000 using USDC in a live cross-border pilot. Now, of course, when you see $750,000, who cares about that? We're talking about billions, hundreds of billions of dollars. This is just companies and banks trying to figure out: can this actually work? And it does work. The seven-day trial used USDC purchased through ARX, with funds reaching Visa in under an hour, including over the weekend. This is great for finality. This is good for banks as they can jump on board.
Fiserv Launches Rough Rider Coin on Solana for North Dakota Banks
Solana just brokered a deal with US banking in North Dakota. Now again, this isn't a massive thing because North Dakota is not a gigantic state with a huge population. But this just goes to show you where things are going. My thesis was always the same: what actually moves the market right now is a little bit of utility and a whole lot of speculation. So as we talk about this, people say, "Oh, there's a bunch of North Dakota banks — sounds good. Oh, Lloyds and Visa actually work together and they're using cross-border payments — sounds good." And you see where things go. People are saying this could be the next big thing, and I think it all comes down to the rails.
Fiserv launched Rough Rider coin on Solana — what a horrible name — giving more than 90 North Dakota banks and credit unions a new dollar settlement route. Fiserv's platform is live with Rough Rider on Solana, giving North Dakota institutions their interbank settlements. Versa Bank issues Rough Rider under BND oversight, while token access remains restricted to financial institutions. Again, they're probably just going to trial it and see how it works out. Fiserv reports more than 90 participating institutions — these are small banks in North Dakota — but they don't disclose the payment volume nor an active sender count. So again, it really comes down to this: speculation, a little bit of utility. If you can do that, that is where altcoins will shine.
Market Overview and Green Day Recap
We can just see that today is a nice green day. Bitcoin up 2%, almost at $86,000. Very nice. Ethereum at $2,700. BNB — everything's up across the board except for Zcash, but it's done enough. It's fine. Zcash holders, congratulations — but not today. Cardano up 2%. I love these days. I love the green days. It makes me feel a little bit of vindication as we were throwing all that sand into the ocean. But these are good things.
Live Q&A: Midnight Protocol, Near Intent Hack, and Market Sentiment
Host: All right, good one. Slow news — I can't believe I'm actually able to tune into a live stream. Congratulations. We do them every day. It was a good pump today. The market's doing great. No one's really complaining too much on X. It's been pretty rough over on Twitter for, I don't know, nine months to a year. Not too happy.
Look, this isn't a political channel, but you can't come on here and say, "Oh, everybody should love this guy." I think that all politicians are like models — they're all wrong and some are useful. I think there's been mistakes made. I think we can all agree there, especially on the digital asset side. I just don't like to talk about politics because it screws everything up for everybody. Everybody gets all pissed off.
On Midnight — that has been a pretty good one. Charles Hoskinson talks quite a bit about this. It's essentially about being able to put privacy within your transaction, whatever crypto or digital asset you're actually using. And it doesn't matter what it is — it could be Bitcoin, it could be Cardano, whatever. There are a lot of chains that Midnight is working with. Let me see where it is. I think it's in the 80s — 87 cents, excuse me. Done pretty well. We had talked about this before. Wow, look at that — that's a nice chart. Three months: started off okay, three cents, and now we're up to 40 cents. Dropped to a low of a penny, penny and a half, but in 30 days it's up 163%. So yeah, something to watch. Actually good utility and actually works. That's a good one.
On Near Protocol — apparently it wasn't Near Protocol itself. A guy brought this up yesterday on the NFA live show, but there was a small issue. Let me pull up this article. Near Intent says it's identified the hacker. Let me bring this up.
So what's happening: Near Intent — so this is the intent protocol — was hacked for $3.828 million. Not a big deal. If we take a look at BitGet, that was a 300-plus million dollar hack. That's a real hack. This is a drop in the bucket. Near Intent has identified the individual behind a security breach resulting in the loss of $3.8 million in user funds on Thursday, and they gave them 48 hours to return the funds under responsible disclosure. "We have identified you." In their next post, they shared three different wallet addresses.
On Thursday, Near Intent paused services after detecting a bug in the omni deposit and withdrawal infrastructure. Preliminary investigation found $3.8 million in funds were stolen, and they pledged to compensate affected users in full. Blockchain investigator Zach XBT said the funds from the incident were transferred to the KuCoin exchange and bridged to Bitcoin. What is it with KuCoin? Is that all they do — not do KYC and AML and let all the hackers in? If you're using KuCoin, they suck. You should probably stop using them, because every time there's a hack, it seems like things go right through KuCoin. I don't know what it is about them. Well, we'll see. Maybe I'm incorrect.
We live in a space where hacks are common. That $3.5 million is considered normal. Unfortunately, that's true. That's why when people say this is the future of finance, I'm like, we need to go a long way before we get to massive financial institutions putting everything on chain. That's why there are so many different ones coming out and saying, "Okay, let's do some tests, because it's okay if we lose some funds here and there, but if we lose our customers' funds, then we lose the whole business because we get sued out of existence." So there's a reason why these things take so long. And again, this is why I say for the price to move, it's all speculation mostly and a little bit of utility. We get a little bit of utility, things go just fine.
I love America. I think it's the greatest country and I think we'll be just fine.