Jerome Powell’s Speech Sparks Market Optimism

After Jerome Powell, the President of the Federal Reserve, delivered his address at the Jackson Hole Economic Symposium, the cryptocurrency market experienced a notable surge. Powell’s unexpectedly gentle tone has led to forecasts of possible new highs for major cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH).

What Did Powell’s Address Entail?

Addressing the Symposium, Powell highlighted potential risks in the employment arena and suggested the possibility of future interest rate reductions. He pointed out that the Fed’s policy interest rate has been unchanged at 4.25% for the past eight months, indicating that adjustments may be needed in light of current economic conditions. Additionally, tariffs from the Trump administration, he suggested, might only have short-lived implications for inflation.

Is There a Rebound for BTC and ETH?

Following Powell’s remarks, there was a notable uptick in cryptocurrencies and stocks, with expectations solidifying around a Fed rate cut in September, now sitting at a 90% likelihood. Analysts generally remain optimistic that this positive sentiment will endure in the short term.

Monarq Asset Management analysts predict Ethereum may soon eclipse the $5,000 mark. Sam Gaer, the firm’s Guidance Fund Investment Director, emphasized the optimistic market conditions, hinting at potential record-setting performances for both Bitcoin and Ethereum.

Ether, Ethereum’s native cryptocurrency, witnessed a rise of approximately 10% over the past day. It achieved a new high, surpassing $4,800, with its trading value around $4,700 at the time of reporting. Bitcoin climbed to $117,400 before settling around $115,600.

Spencer Yang of BlockSpaceForce foresees new peaks by year-end if the Fed enacts a rate cut in September, projecting BTC, ETH, BNB, SOL, and LINK as significant movers.

How Significant are ETF Trends and Risks?

Steve Lee, co-founder of Neoclassic Capital, remarked that while Powell’s stance is favorable for cryptocurrencies in the near-term, the trajectory of BTC and ETH spot ETFs will critically influence price movements. Lee stresses that ETF market developments in the upcoming week will be decisive in sustaining the upward trend.

Despite the rally, some risks linger. These include rising institutional interest in cryptocurrencies and uncertainties from stock market volatility. Lee also warned of a brewing “bubble” as digital asset fund quality deteriorates.

Data has shown an uptick in public companies acquiring BTC, with over 100 such firms holding 984,971 BTC collectively. Gaer cautions that market overvaluation and broader geopolitical shifts could introduce volatility.