This week, Bitcoin is all about the American economy, for which we’re receiving some important labor market reports, among other things. The first came in yesterday, the JOLTS report, and it showed a sharp decline in the number of job openings.
This theoretically points to a weaker economy and makes the market more optimistic about rapid interest rate cuts.
Bitcoin is undervalued
Fidelity Digital Assets is now bullish on Bitcoin. The fund, which manages trillions of dollars in assets for investors worldwide, notes that Bitcoin is currently undervalued.
As evidence of this, Fidelity discusses the “Bitcoin Yardstick Indicator,” which divides Bitcoin’s market value by its hashrate, the total amount of computing power on the network.
The lower the ratio, the cheaper the network is relative to the level of security, computing power, and energy.
This suggests that Bitcoin is less expensive relative to the strength of the network.
Furthermore, according to Fidelity, Bitcoin is in an “acceleration phase” during which rises to new highs are not uncommon. Fidelity therefore sees potential for a new all-time high in the near future.
In Q1 2025, the ratio remained between -1 and 3 standard deviations, meaning the indicator has cooled compared to Q4 2024 levels; a period in which the Bitcoin Yardstick showed signs of overheating.
We also saw the proportion of Bitcoin’s supply that is currently illiquid increase. This indicates that more Bitcoin has ended up in the hands of people with no sales history, and thus, that fewer are available on the market.
Bitcoin Receives Help from the American Economy
So, Bitcoin also received help from the American economy in the form of the JOLTS report.
The number of job openings in the United States fell to 7.19 million in March, compared to 7.57 million in February. This data point also fell well below the 7.48 million that analysts were expecting.
A lower-than-expected JOLTS number indicates a cooling labor market, and this increases expectations for the number of interest rate cuts by the U.S. Federal Reserve, which weakens the dollar somewhat and should generally have a positive effect on risk assets like Bitcoin.
Unless, of course, a severe recession hangs over the market, in which case Bitcoin will also initially suffer severe losses.
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