Ether broke past its 2021 all-time high on Friday after Jerome Powell, the Fed chair, suggested the possibility of interest rate cuts, pushing investors back toward riskier assets. Ether jumped 15%, rising to $4,885 and topping its previous peak of $4,866 set in November 2021. Bitcoin also moved up 4% to $117,008.
The rally started during Powell’s speech at the annual economic conference in Wyoming. In his remarks, he said that with monetary policy currently sitting in restrictive territory, the Fed may need to reconsider its approach given shifting economic risks. His words fueled speculation that a September rate cut is now on the table.
According to Selini Capital CEO Jordi Alexander, traders had not expected such dovish remarks. He stated that the market had been leaning risk-off in recent sessions, with tech and crypto assets under pressure. Powell’s remarks triggered a sharp shift as investors scrambled to cover short bets, a move he suggested could extend through the weekend due to thin trading conditions.
CoinGlass data shows that during Powell’s address, nearly $120 million worth of Ether short positions were liquidated in just one hour.
Publicly traded companies tied to Ether also saw a rebound. SharpLink Gaming and Bitmine Immersion each jumped more than 10% after facing pressure earlier in the week. However, Bitmine still ended the week down 7%, its first decline in nearly a month.
Meanwhile, shares of ETHzilla, a firm backed by Peter Thiel that holds large Ether reserves, slid over 31% after announcing plans to resell nearly 75 million shares. The company’s stock closed down 31.4% following Powell’s speech. Solana-focused DeFi Development jumped 21%, while Strategy and Coinbase each advanced 6%.
Over the last two months, Ethereum has increasingly taken the lead in the broader digital asset market. Analysts attribute the shift to favorable regulatory developments that have sparked institutional interest, particularly in stablecoins. Stablecoins now generate around 40% of the total blockchain fees, with over half running on the Ethereum network.
According to Tom Lee of Fundstrat, Ether could become the biggest long-term macro trade over the next decade. He argued that the rise of stablecoins is comparable to a breakthrough moment for the crypto industry. He also pointed to new U.S. initiatives like the GENIUS Act and the SEC’s Project Crypto as signs that major financial players are moving onto blockchain infrastructure.
The renewed investor interest in crypto as the possibility of Fed rate cuts looms is likely to keep exchanges owned by firms like Coinbase Global Inc. (NASDAQ: COIN) busier as retail and institutional traders bolster their holdings of crypto assets.
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