AI Tokens Lead Crypto Rebound Amid Strong U.S. Economy

Alternative
cryptocurrencies,
or
altcoins,
lead
the
digital
asset
market’s
charge
higher
on
Friday
after
geopolitical
worries
subsided
and
a
blowout
U.S.
jobs
report
put
recession
fears
to
bed
for
now.

Artificial
intelligence-focused
protocol
Bittensor’s
{{TAO}},
Render’s

(RNDR)
tokens
rallied
14%
and
8%
over
the
past
24
hours,
while
the
CoinDesk
Computing
Index,
which
tracks
several
AI-related
tokens,
was
the
biggest
gainer
among
crypto
sectors.

Notably,
asset
manager
Grayscale
upsized
the
weight
of
TAO
in
its
decentralized
AI-focused
crypto
fund
to
27%
from
3%
in
July,
while
adding
the
Graph

(GRT),
replacing
Livepeer
(LPT).

Bitcoin
steadily
climbed
during
the
U.S.
trading
hours
to
$62,300,
up
2.2%
during
the
day.
The
broad-market
crypto
benchmark
Coindesk
20
Index
rose
4.2%
during
the
same
period,
underscoring
that
altcoins
outperformed
BTC.

Perhaps
helping
the
move
was
a
much
stronger-than-anticipated
U.S.
labor
market
report,
which
added
251,000
jobs
in
September,
blowing
past
estimates
for
140,000.
The
unemployment
rate
decreased
to
4.1%,
quieting
concerns
of
an
imminent
recession.

The
positive
sentiment
rippled
through
the
stock
market
as
well,
with
the
S&P
500
and
Nasdaq
indexes
closing
the
day
0.9%
and
1.2%
higher,
respecitvely.
The
U.S.
10-year
Treasury
bond
yield
jumped
13
basis
points
to
just
shy
of
4%,
while
the
U.S.
dollar
index
rose
to
its
strongest
level
since
mid-August.
Following
the
report,
investors
now
overwhelmingly
expect
a
smaller
25
basis
point
interest
cut
from
the
Federal
Reserve
in
November.

“Bitcoin
and
the
longer
tail
of
crypto
assets
are
sensitive
to
labor
market
data
because
it
influences
the
Fed’s
decision
on
rate
cuts,
which
in
turn
have
a
positive
impact
on
BTC
as
borrowing
costs
fall,”
Leena
ElDeeb,
said
research
analyst
at
digital
asset
manager
21Shares.
“We
expect
flows
to
start
recovering
following
the
escalation
of
geopolitical
tensions
that
shook
the
market
over
the
past
week.”

Markus
Thielen,
founder
of
10x
Research,
said
that
the
early
October
sell-off
is
likely
over,
with
prices
likely
to
grind
higher
in
the
coming
weeks.
Derivatives
markets
data
suggest
that
investors
aren’t
looking
for
hedges
against
further
downside,
added,
Thielen,
while
large
liquidations
cascades
as
happened
earlier
this
week
often
marked
local
price
bottoms.

“As
long
as
the
U.S.
economy
stays
strong,
stocks
and
crypto
should
have
room
to
rise,”
Thielen
said.

Will
Clemente,
founder
of
Reflexivity
Research,
said
that
the
Fed
easing
monetary
policy
into
a
strong
economy
bodes
well
for
bitcoin
after
this
week’s
leverage
flush.

“People
puked
their
positions
because
they
were
over-leveraged
or
fell
for
the
Iran
bottle
rockets
for
a
second
time,”
Clemente
said
in
an
X

post.
“Now
with
this
morning’s
great
jobs
report,
the
economy
is
confirmed
strong
while
we
just
started
a
global
easing
cycle
and
now
we
just
got
a
positioning
reset.”

“Lots
of
worry,
but
BTC
keeps
grinding
up,”
he
added
in
a
follow-up

post.