5 Minutes
Powell’s Jackson Hole signal and market context
Federal Reserve Chair Jerome Powell’s keynote at the Jackson Hole economic symposium injected fresh optimism into risk assets. While his tone remained deliberately cautious, Powell said the Fed will "consider changes to our policy stance," signaling that an interest-rate reduction could be on the horizon as economic data and a steady unemployment rate give policymakers room to ease. Concerns about inflation, including the potential impact of tariffs, remain, but markets interpreted his language as a nod toward looser monetary policy in the months ahead.
Immediate market reaction: stocks and crypto rally
Equity markets reacted quickly: the Dow notched a fresh record high for 2025, the S&P 500 delivered its best session in three months, and the Nasdaq 100, dominated by tech names, climbed sharply. Crypto traders were no exception. Bitcoin initially jumped from about $112,000 to $117,000 before stabilizing near $115,000 at the time of reporting. However, the most eye-catching move was in Ether (ETH).
Ether’s surge and the ATH caveat
ETH rallied aggressively, posting roughly a 15% gain in under three hours and briefly hitting exchange-specific highs. That spike led to celebratory chatter across social channels. Officially, CoinMarketCap still lists Ethereum's all-time high at $4,891.70 on November 16, 2021, and Friday’s peak was cited as approximately $7.47 shy of that record on their consolidated data—underscoring the difference between exchange-level highs and aggregate market records.
Altcoin breadth: more than just ETH
The rally was broad. Solana, Dogecoin, Cardano, Sui, Avalanche, and Polkadot each climbed more than 10% in the same session, reflecting a wider appetite for higher-beta crypto assets as traders rotated into riskier positions.
ETF flows and why Ether is gaining traction
One striking datapoint that illustrates shifting sentiment is the divergence in exchange-traded product flows on that trading day. Data from SoSoValue showed Bitcoin-focused ETF products recorded roughly $23 million in outflows, while Ether-focused funds recorded inflows of about $337.6 million. Those flows highlight a short-term rotation into Ethereum exposure among institutional and retail ETF buyers.
ETF impact on volatility and perceived opportunity
Analysts argue that Bitcoin's growing ETF adoption has dampened BTC volatility, making it a less attractive vehicle for traders seeking quick returns. In contrast, Ethereum still appears under-owned in ETF formats and therefore feels more reactive and volatile—qualities that can draw traders hunting short-term gains. As one founder noted to Bloomberg, many traders believe the Bitcoin trade has already largely played out, whereas Ethereum still presents perceived upside and lower institutional saturation.
Macro reasons a Fed rate cut can lift crypto demand
A Federal Reserve rate cut would lower returns on cash and short-term government debt, nudging investors toward higher-yielding assets. For crypto markets, this dynamic can be powerful: lower borrowing costs support leverage and margin activity, while lower yields on traditional savings increase the opportunity cost of holding cash, prompting reallocation into risk assets including Bitcoin, Ethereum, and altcoins. Futures and options desks price in an increased probability of a September cut after Powell’s remarks—market-implied odds rose to roughly 81% from 75% before the speech, with the FOMC meeting scheduled for September 16–17.
Institutional demand and supply dynamics
Meanwhile, proponents of Bitcoin maintain that structural supply pressure from institutional treasury purchases and ETF demand will continue to support BTC’s price over the longer term. Some Bitcoin supporters remain bullish on multi-year targets, arguing that supply constraints and growing institutional adoption could eventually push market capitalization to rival other major stores of value.
What traders and investors should watch next
Key near-term catalysts include the Federal Open Market Committee decision in mid-September, on-chain indicators for ETH and BTC, and continued ETF flow data. Traders should also monitor liquidity in derivatives markets, staking demand for Ethereum products, and whether broader risk appetite persists across altcoins. For investors focused on longer-term fundamentals, developments in Layer 1 adoption, DeFi usage on Ethereum, and on-chain metrics such as gas fees and transaction volume remain essential.
In short, a combination of renewed macro easing expectations, significant ETH ETF inflows, and a broader rotation into higher-beta crypto assets explains why Ether is currently stealing the spotlight from Bitcoin. Whether this trend persists will depend on upcoming Fed actions, fund flows, and the evolving institutional adoption landscape for both BTC and ETH.
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