Jerome Powell's Speech Sparks $140 Billion Crypto Market Surge

Following Powell's speech, the crypto market gained $140 billion in one hour, with investor sentiment turning bullish on interest rate expectations. Bitcoin and altcoins saw strong price jumps immediately, with altcoins like Solana, Cardano, and Avalanche experiencing significant volume increases. This surge suggests momentum is building, and traders are now watching upcoming economic data and Fed commentary for signs of further support.

Following Federal Reserve Chairman Jerome Powell's highly anticipated speech at the annual Jackson Hole symposium, the crypto market experienced a significant boost. In just one hour, the market gained $140 billion, with investor sentiment shifting to a bullish outlook on interest rate expectations. Bitcoin and altcoins such as Solana, Cardano, and Avalanche saw strong price jumps and significant volume increases, indicating a surge in momentum.

The speech, which was closely watched by market participants, provided insights into the Federal Reserve's potential interest rate path. Powell's stance against political pressure for substantial rate cuts reassured investors, leading to a positive market reaction. The Federal Open Market Committee (FOMC) meeting minutes had previously suggested a focus on persistent inflation, which may have influenced Powell's cautious approach.

Market analysts and traders are now closely monitoring upcoming economic data and Fed commentary for further signs of support. The U.S. dollar saw a rise in positive sentiment ahead of Powell's speech, with the one-month risk reversal gauge for the Bloomberg Dollar Spot Index reaching its highest level since July 31 [3]. This shift in sentiment reflects expectations that Powell may not adopt an overly dovish stance regarding interest rate reductions.

Institutional demand for Bitcoin has shown signs of weakening, with spot Bitcoin Exchange Traded Funds (ETFs) experiencing outflows of over $520 million on Tuesday [1]. However, the recent price stabilization around $113,500 suggests a potential recovery in investor confidence. The Federal Reserve's interest rate path and economic data will continue to influence market sentiment and drive volatility in the crypto market.

Traders are also keeping an eye on upcoming developments such as the launch of USDC-settled Bitcoin and Ether options by Deribit, scheduled for August 19 [2]. This expansion of stablecoin offerings could provide further liquidity and support for the market.

The surge in Bitcoin and altcoins following Powell's speech highlights the impact of central bank policy on the crypto market. As traders and investors await further economic data and Fed commentary, the momentum in the crypto market is likely to continue, with Bitcoin and altcoins remaining at the forefront of investor attention.

References:
[1] https://www.mitrade.com/au/insights/news/live-news/article-3-1054821-20250820
[2] https://coinmarketcap.com/community/articles/68a057a3366f212e616ef5b1/
[3] https://www.markets.com/vc/news/dollar-bullish-sentiment-rises-ahead-powell-speech-755-en-eu/