Bitcoin News Today: Investors Bet on Fed Rate Cut as Crypto Greed Surges

The U.S. Federal Reserve’s recent comments by Chair Jerome Powell have reinvigorated expectations of a potential rate cut as early as September 2025, sparking a notable response in financial and crypto markets. Powell’s remarks during the Jackson Hole Economic Symposium suggested that current inflation and labor market conditions “may warrant adjusting” the Fed’s policy stance. This signal has been interpreted as a shift toward a more accommodative monetary policy, increasing speculation that a rate cut is likely at the upcoming Federal Reserve meeting on September 17 [1]. According to the CME FedWatch Tool, the probability of a rate cut has increased to 87%, up from 75% before Powell’s speech [3].

The anticipated easing of monetary policy has already driven a surge in risk-on sentiment, particularly within the cryptocurrency market. The Crypto Fear & Greed Index, which gauges market sentiment, climbed to a “Greed” score of 60 following Powell’s address, a significant rise from Friday’s “Neutral” reading of 50. This shift reflects growing optimism among crypto investors, who have historically viewed lower interest rates as favorable for high-risk assets [1]. Ether (ETH), the second-largest cryptocurrency by market capitalization, surged past its 2021 record, reaching as high as $4,885.00. This 15% rise was attributed to a combination of Powell’s dovish tone and renewed institutional interest in Ethereum, particularly in stablecoin usage and blockchain applications [2].

Bitcoin (BTC) also experienced a notable price rebound, rising to approximately $117,000 in the wake of the Fed’s comments. The cryptocurrency's surge triggered a significant amount of short liquidations, with over $379.88 million in short positions closed as investors scrambled to reposition themselves [1]. The broader financial market also responded positively, with crypto proxy stocks such as Strategy (MSTR) and Coinbase (COIN) rising by more than 5% and nearly 7%, respectively. These movements highlight the growing interconnectivity between traditional finance and the crypto ecosystem as macroeconomic signals influence investor behavior [3].

Despite the market’s enthusiastic reaction, some Fed officials, such as St. Louis Fed President Alberto Musalem, have indicated caution. Musalem stated that he requires additional time before committing to a rate cut decision, emphasizing the need to reassess the balance of risks up to the eve of the Federal Open Market Committee meeting [1]. This divergence in internal Fed sentiment introduces uncertainty into market forecasts, though the dominant narrative remains one of increasing probability for a rate cut.

The market’s response to Powell’s comments underscores the pivotal role of the Federal Reserve in shaping asset valuations. As interest rate adjustments influence liquidity and risk appetite, investors continue to closely monitor developments ahead of the September meeting. The alignment of macroeconomic expectations with regulatory developments in crypto, such as the growing institutional adoption of stablecoins on the Ethereum network, may further amplify market movements in the coming months [2]. For now, the market is pricing in a significant rate cut, with prediction markets showing an 80% probability of a quarter-point reduction, a marked increase from earlier estimates [3].

Source:

[1] Fed-Fueled Crypto Rally Pushes Sentiment Into 'Greed' (https://cointelegraph.com/news/crypto-market-greed-bitcoin-ether-price-rally-federal-reserve-dovish)

[2] Ether notches first new record since 2021 after Powell (https://www.cnbc.com/2025/08/22/crypto-market-today.html)

[3] Bitcoin and Crypto Stocks Surge as Powell's Rate-Cut Hint (https://www.investopedia.com/bitcoin-and-crypto-stocks-surge-as-powell-rate-cut-hint-revives-risk-appetite-11795898)