Here's How the Missing Jobs Report Is Hammering the Crypto Sector

If you're driving at night and your headlights suddenly dim, it's usually smart to slow down until you can see again, and that's roughly one of the dynamics affecting crypto right now. After a long U.S. government shutdown, the Bureau of Labor Statistics (BLS) scrapped the normal October jobs report and also opted to cancel reporting the October Consumer Price Index (CPI), saying it could not legally run the surveys during the shutdown and cannot rebuild them afterward. The October unemployment rate and inflation data will never appear as official numbers, and only pieces of the payroll data will be folded into November's release.

At the same time, Bitcoin (CRYPTO: BTC) has fallen sharply, and the broader crypto market has lost about $1 trillion in value during the past six weeks, with Ethereum (CRYPTO: ETH) and Solana (CRYPTO: SOL) slipping significantly as well. The missing data is not single-handedly causing that drop, but it is making an already pessimistic mood among crypto investors into something substantially worse. So here's how that process works in practice, and what long-term investors can do about it.

Image source: Getty Images.

Skipping a jobs report looks really bad in the middle of a sell-off

Markets were already in a bit of a tense spot before the shutdown.

The Trump administration's ill-advised and chaotically implemented tariff policies were in a perpetual state of flux, and as a result, investors were arguing about whether growth was slowing, whether inflation might reaccelerate, and how long the Federal Reserve would keep interest rates high. Withholding a month of core data in that unstable moment creates exactly the kind of fog that keeps investors up at night, because it forces the Fed and big financial institutions to lean more on their models and less-preferred (but still available) economic indicators instead of the official statistics they normally use, increasing the uncertainty about the direction of their future actions and casting at least a little doubt on the correctness of those actions as well.

The BLS has said that the data gap is mainly a technical byproduct of the legal limits it faces on surveying the economy during the government shutdown, and not a deliberate attempt to bury terrible numbers. These claims are difficult to believe, but also hard to disprove.

The bigger point here is that perception drives behavior. In an environment where many were already worried that growth is slowing and asset prices look stretched, both within crypto and in the stock market, a permanent blank spot in the data set naturally makes risk-averse investors a lot more skittish, and with good reason. Planning around that skittishness is now something that keen investors are obliged to do, even if their own interpretation of why the data wasn't released is different.

What's in the line of fire, and what to do about it

Another important piece of the story is who owns the big coins now.

A decade ago, Bitcoin mostly sat in the hands of retail investors and crypto natives. Today, it is deeply embedded in traditional finance, with U.S. spot Bitcoin exchange-traded funds (ETFs) holding a significant portion of the coin's market value. Ethereum and Solana are on a similar path.

Once ETF issuers, hedge funds, and other institutional holders dominate the marginal money flows into these coins, they trade more like macro-sensitive growth assets than like their previous identities as the isolated financial experiments of yesteryear. If the economic narrative looks weaker and the data are fuzzier, the simple portfolio move for big players is to trim positions in Bitcoin, Ethereum, and Solana before things get any uglier. The current decline in the crypto sector is that instinct playing out in real time.

So what should an individual investor do with this?

Start by separating the headlines from the long-term investment theses for these coins, as they're not affected at all by some missing jobs data. Put differently, even if financial institutions are selling, it doesn't mean that you have to copy their move, as their needs, objectives, capabilities, and tolerances are extremely different from your own. But, you should probably be very cautious about buying any smaller altcoins right now because they are even riskier than usual.

Other than that, be cautious about reading too much into what the government is not publishing.

It is tempting to assume that if the numbers were good, they would be trumpeted. That's likely true, but it's also very possible that October's set of economic data were merely mediocre rather than being truly ghastly like many seem to believe.

Alex Carchidi has positions in Bitcoin, Ethereum, and Solana. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and Solana. The Motley Fool has a disclosure policy.