Ether Hits New All-Time High Following Powell’s Rate Cut Signal at Jackson Hole
In a major market move on Friday, Ether (ETH), the world’s second-largest cryptocurrency by market capitalization, surged past its previous all-time high for the first time since 2021. The digital asset climbed as much as 15% in late trading to reach $4,885.00, surpassing the prior record of $4,866.01 set in November 2021. This impressive rally coincided with Federal Reserve Chair Jerome Powell’s annual speech at the economic symposium in Jackson Hole, Wyoming, where he hinted that future interest rate cuts might be forthcoming.
Powell’s Jackson Hole Remarks Spur Risk-On Rally
During his address, Powell noted that with monetary policy currently in a restrictive stance, it “may warrant adjusting our policy stance” amid a shifting balance of economic risks. This dovish tone toward potential rate reductions caught many investors by surprise, particularly given recent market expectations of continued tightening. Cryptocurrency markets quickly reacted, viewing the speech as a signal that the Federal Reserve could ease monetary policy sooner than anticipated.
Jordi Alexander, CEO of crypto trading firm Selini Capital, commented on the market’s response: “Traders seem to have been caught completely off-sides by Powell’s dovish comments today. The market positioning in recent sessions showed clear risk-off moves in assets like crypto and tech, but today’s indication of a September rate cut has triggered a panicked repositioning. This could extend through the typically illiquid weekend as short sellers get squeezed.”
The aftermath was dramatic—CoinGlass data revealed that within one hour of the speech, approximately $120 million worth of short positions on Ether were liquidated. In leveraged trading, these short squeezes force traders betting against Ether to buy back the coin rapidly, further fueling price spikes.
Bitcoin and Crypto Sector Moves
Bitcoin (BTC) also saw gains following Powell’s remarks, rising about 4% to $117,008.29. Yet Ether’s outperformance was pronounced, with the cryptocurrency more than doubling in value over the past two months — a period during which it has notably outpaced Bitcoin.
Several publicly traded companies focused on Ether experienced corresponding stock price rebounds. Bitmine Immersion and SharpLink Gaming, both Ether-centric firms that had recently suffered losses amid a tech-crypto rotation, jumped 12% and 15%, respectively, on Friday. Conversely, ETHzilla, an Ether treasury company backed by Peter Thiel, dropped sharply by over 31% after announcing a large share resale, closing the session down by 31.4% despite the broader market uplift.
Additionally, other crypto-related firms such as the Solana-focused treasury entity DeFi Development surged 21%, while exchanges and bitcoin proxy investment products like Coinbase and Strategy Advanced saw gains of around 6%.
The Macro View: Ether as a Long-Term Macro Trade
Analysts see Ether’s strong performance reflecting deeper macroeconomic and regulatory trends. Fundstrat’s Tom Lee recently highlighted Ether as “the biggest macro trade over the next 10 to 15 years,” pointing to the rise of stablecoins as a “Chat GPT moment for crypto.” Regulatory clarity encircling stablecoins and blockchain innovation, including initiatives like the GENIUS Act and the SEC’s Project Crypto, have spurred renewed institutional interest underpinning Ether’s ecosystem.
Stablecoins alone account for roughly 40% of all blockchain transaction fees, with more than half utilizing the Ethereum network. This infrastructure advantage, combined with the evolving regulatory landscape, positions Ether as a key beneficiary in the next phase of crypto adoption and integration with traditional Wall Street finance.
Looking Ahead
The market reaction to Powell’s speech illustrates the close interplay between macroeconomic policy and cryptocurrency valuations. As the Fed signals the possibility of rate cuts, risk assets including cryptocurrencies have rallied on hopes of an easier financial environment.
While volatility remains a hallmark of crypto markets, Ether’s recent ascent and breaking of its all-time record underscore its resilience and growing appeal among traders and institutional investors alike. With the potential of rate reductions on the horizon and regulatory frameworks gradually maturing, Ether may continue to capture attention as a major player in the global financial ecosystem.
— Reporting by Tanaya Macheel and Nick Wells, CNBC
[This article is for informational purposes and does not constitute investment advice.]