Major Cryptos Rebound as Experts Downplay Recession and Stagflation Concerns
10/9/2025

Major cryptocurrencies and equities rose Wednesday, as analysts increasingly downplayed fears of stagflation and recession triggered by a downward revision of U.S. jobs data.

Bitcoin (BTC) reclaimed $112,000, trading around $113,745, while European stocks opened higher, reflecting a broadly positive market sentiment. The surge followed a surprising report from the U.S. Bureau of Labor Statistics (BLS), which revised the economy’s job growth for the 12 months through March 2025 downward by 911,000 positions.

For over a year, market bulls in both equities and crypto had been betting on a resilient labor market to sustain economic growth despite persistent inflation. Tuesday’s revision briefly shook that confidence, pushing BTC from $113,000 down to $110,800.

Some investors interpreted the BLS revision as a signal of an impending recession. However, Michael Englund, principal director and chief economist at Action Economics, argued the data revealed little about the current business cycle.

“These revisions are more reflective of the secular trajectory of the U.S. labor force than of the business cycle itself,” Englund said. “Trend-growth for monthly payrolls is now likely in the tens of thousands rather than the hundreds of thousands seen during most of the current expansion. We now project labor force growth of about 90,000 going forward, down from 150,000–200,000 previously.”

Englund noted that the post-COVID labor force expansion had been fueled by net annual in-migration of roughly one million people, a trend that has now reversed to net out-migration of one to two million. “This shift implies slower growth in civilian employment in future surveys,” he added.

Markets appear to have embraced this perspective. BTC has rebounded above $112,000, while altcoins including Ether (ETH), XRP, and Dogecoin (DOGE) have recovered much of Tuesday’s losses. Solana (SOL) surged to $222, its highest since February 1. S&P 500 futures traded 0.3% higher, with European equities posting gains at the open.

Stagflation Fears Overblown

Concerns about stagflation—a combination of high inflation, high unemployment, and stagnant growth—have resurfaced due to the BLS revisions and the upcoming U.S. Consumer Price Index (CPI) report, expected to show inflation near 3%, well above the Fed’s 2% target.

However, experts suggest fears are exaggerated. Marc Chandler, managing partner and chief market strategist at Bannockburn Global Forex, emphasized that U.S. GDP remains above the Federal Reserve’s “trend estimate” or non-inflationary pace.

“Stagflation concerns remain overstated. Inflation is slightly elevated, but Fed officials appear focused on looking through tariff-related increases,” Chandler told CoinDesk. “It seems clear the Fed will resume easing next week.”

Traders currently see a 91% probability of a 25-basis-point rate cut to 4% on Sept. 17, according to CME’s FedWatch tool, though some anticipate a larger 50-basis-point reduction.

Eyes on CPI and PPI Data

Expectations of rate cuts could rise further if Wednesday’s U.S. Producer Price Index (PPI) or Thursday’s CPI show signs of disinflation, which would likely support risk assets in the near term.

Yet analysts caution that elevated expectations could also trigger volatility. “If the market expects a 50-basis-point cut but the FOMC delivers only 25, we could see a sell-off,” said Greg Magadini, director of derivatives at Amberdata.