Cryptocurrencies experienced a significant upswing late Friday, as Federal Reserve Chair Jerome Powell adopted a dovish tone at the renowned Jackson Hole economic symposium, defying widespread expectations for a more aggressive stance. This unexpected move has fueled optimism among asset managers, who are now forecasting new records for bitcoin (BTC), ether (ETH), and select altcoins.
Powell’s Dovish Turn Sparks Optimism
In a pivotal address, Powell hinted that the labor market might benefit from reduced borrowing costs, maintaining the benchmark interest rate at 4.25% for eight months. “Downside risks to employment are rising,” Powell noted in his keynote speech, adding that the impact of President Donald Trump’s tariffs on inflation might be fleeting. With the current policy in restrictive territory, Powell’s remarks suggested a potential policy shift, prompting a surge in both cryptocurrencies and stocks. Following the speech, the probability of a September Fed rate cut leaped to 90%. This dovish turn was anticipated by some, as detailed in our coverage of Volatility Vanishes Across Markets as Traders Brace for Powell’s Jackson Hole Speech.
Bitcoin and Ether Poised for New Heights
The market’s bullish response has analysts predicting fresh highs for BTC and ETH. At Monarq Asset Management, chief investment officer Sam Gaer expressed optimism, stating, “We maintain our overall bullish stance. Market internals remain constructive, with few signs of overheating.” Gaer sees a clear path to record highs for both BTC and ETH, with ether expected to surpass $5,000 soon. He noted increased demand from treasury vehicles as various summer deals close or de-SPAC, alongside ongoing institutional and retail inflows.
Ether has already surged nearly 10% in 24 hours, reaching above $4,800. Currently, it trades at $4,700, according to CoinDesk data. Meanwhile, bitcoin stands at around $115,600, slightly off from its overnight peak of $117,400. Deribit-listed options data highlights strong demand for ether, suggesting it may outperform in the near term. Despite a 9.6% pullback from its all-time high, BTC shows resilience, driven by substantial whale wallet accumulation around the $113k mark. For more insights on Bitcoin’s price movements, see All Eyes on Powell as Bitcoin Holds Below $113K: Crypto Daybook Americas.
ETF Flows and Emerging Projects
Steve Lee, co-founder and managing partner at Neoclassic Capital, views Powell’s dovish pivot as a short-term positive for cryptocurrencies. He emphasizes the significance of bitcoin and ether spot ETF inflows, which could signal another upward leg in the market. “The key question is whether this momentum holds beyond the low-liquidity weekend,” Lee shared, highlighting the institutional influence on BTC and ETH price dynamics.
Lee also pointed to emerging projects like Base, Monad, Story, and SUI as promising ventures. Gaer, meanwhile, expressed interest in the Solana ecosystem, focusing on high-beta tokens such as JITO and JUP, alongside Raydium and PUMP, citing both their fundamental and forward-demand prospects.
Potential Headwinds and Cautionary Notes
Despite the current rally, some experts urge caution. The buzz around digital asset treasuries (DAT) as a vehicle for public market exposure to digital assets is tempered by concerns over deal quality, according to Lee. The trend, initiated by Nasdaq-listed Strategy’s BTC adoption in 2020, has seen over 100 publicly-listed firms amass nearly a million BTC. “The trend may continue, but risks associated with this are not ignorable,” Lee warned.
Gaer also advised vigilance regarding potential pitfalls from an overheated equity market and macro or geopolitical shocks, which could disrupt the current positive trajectory.
As the market digests Powell’s unexpected dovishness, the crypto landscape is poised for potential new records. Yet, with optimism comes the need for measured caution, as the interplay of economic policies, emerging projects, and market volatility continues to shape the future of cryptocurrencies. What remains to be seen is how these dynamics will unfold as the year progresses, raising questions about the sustainability of this rally and the broader economic landscape.
Source
This article is based on: Ether Likely to Top $5K, BTC Eyes Record High as Powell Sparks Rally; Watch for DAT Deal Risks: Asset Managers
Further Reading
Deepen your understanding with these related articles:
- Crypto Traders Eye Jackson Hole as Ether, XRP, Solana Drop Sharply in Retreat
- Bitcoin Drops Below $114K, Ether Loses $4.2K as Jackson Hole Speech Might Bring Hawkish Surprise
- Bitcoin’s Jackson Hole Test: How Hard Could Powell’s Address Hit BTC Prices?
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
