Well, that was unexpected. Cryptocurrency markets shot up late Friday, catching a lot of people off guard. The surge came right after Federal Reserve Chair Jerome Powell finished speaking at that big economic conference in Jackson Hole. Honestly, most traders were braced for a tougher message on interest rates. They didn’t get it. Instead, Powell’s tone was surprisingly gentle, and the market reaction was immediate and powerful.
Powell’s Surprising Shift
So what did he actually say? Powell suggested that keeping borrowing costs high might start to hurt the job market. He pointed out that the risks to employment are looking a bit shaky. He also mentioned that the recent tariffs might only push inflation up for a little while. His key line was that the current outlook might “warrant adjusting our policy stance.” That’s central banker talk for “we might cut rates soon.” And the market heard it loud and clear. The probability of a rate cut in September jumped dramatically. Stocks and crypto, which often move together these days, both took off.
Analysts Eye New Highs
This shift has a lot of analysts thinking we could see record prices again, and soon. Sam Gaer from Monarq Asset Management thinks ether could push above $5,000 in the near future. He noted that the market’s internal mechanics still look good, without many signs of it being overdone. He’s probably not alone in that view. Ether itself jumped almost 10% in a day, briefly touching $4,800. Bitcoin also moved up, though it pulled back a bit from its overnight peak. Interestingly, the demand for bullish ether options is outpacing bitcoin right now, which might mean ETH could lead the next leg up.
But it’s not just about the big two. Some are looking at a wider basket. Spencer Yang at BlockSpaceForce mentioned five major tokens—BTC, ETH, BNB, SOL, and LINK—as ones to watch, given their deep ties to different parts of the crypto ecosystem.
Where to Look Next
The immediate focus for many is on the exchange-traded funds. Steve Lee from Neoclassic Capital called Powell’s shift a short-term positive, but he stressed that the real test is whether money keeps flowing into the spot bitcoin and ether ETFs. That’s become a huge driver of institutional money, so Monday’s flows will be a big tell for where things go from here.
A Note of Caution
Of course, it’s not all smooth sailing. Even with this green light from the Fed, there are some potential headwinds. Lee also pointed out that the quality of deals from companies adopting crypto treasuries seems to be slipping, which can be an early warning sign. And let’s not forget the regular stock market. If that gets too hot or there’s some geopolitical shock, it could easily spill over and knock crypto off course. So maybe enjoy the rally, but keep an eye out.
