Crypto Strengthens After Powell's Easing Signal
The crypto market rallied on Friday after Fed Chairman Jerome Powell signaled interest rate easing as early as September in his Jackson Hole speech. The more dovish tone drove a weaker dollar and a rise in risk assets. Bitcoin briefly hovered in the US$116,000-US$117,000 range, while Ethereum surged double-digits to near US$4.8,000, reflecting a recovery in risk appetite following the speech. The odds of a 25 bps rate cut for September also surged to ~90%, underscoring the positive catalyst for crypto assets.
Fundamentally, the prospect of lower borrowing costs is supporting crypto demand: economic growth aided by low interest rates typically drives adoption and capital flows into risk assets. The effects were felt broadly—crypto-related stocks like COIN and MSTR rallied—while the global crypto market cap increased in the past 24 hours, signaling a return of funds to the market.
Going forward, the direction of crypto will be determined by US jobs and inflation data, which the Fed benchmarked before its September decision. If data weakens and the Fed confirms easing, there's room for a crypto rally; conversely, an inflationary surprise could strengthen the dollar and depress crypto prices. For now, the market is reading Powell's message: policy remains restrictive, but ready to be adjusted if employment risks increase—a setup that maintains a positive crypto bias but still introduces short-term volatility.
Source: Newsmaker.id
