Bitcoin News Today: Powell’s Dovish Shift Lights a Fire Under Crypto Markets

Bitcoin surged past $116,500 on Friday as Federal Reserve Chair Jerome Powell signaled openness to rate cuts in September during his speech at the Jackson Hole Economic Symposium. The market reaction was swift and significant, with Bitcoin climbing over 2% in a matter of minutes. The optimism extended to Ethereum and other major altcoins, with Ethereum (ETDUSD) setting a new all-time high of around $4,900 and Binance Coin (BNBUSDT) also reaching an all-time high of approximately $900. The broader cryptocurrency market capitalized on the sentiment, with the total market cap adding over $200 billion in a single day and nearing $4.1 trillion [1] [4] [6].

Prior to Powell’s speech, market expectations had swung between optimism and caution. Weeks of fluctuating economic data, including an unexpected rise in producer prices, had dampened hopes for a rate cut. As a result, Bitcoin had corrected from over $124,000 to under $113,000 in a matter of days. Ether saw a steeper drop, falling nearly 12% from its recent high. However, as Powell outlined a “shifting balance of risks” and suggested the Fed could adjust its policy stance, market sentiment flipped. By the afternoon, prediction markets on Polymarket placed an 80% chance of a 25-basis-point rate cut in September, up from 56% before the speech [1] [2] [3].

The dovish tone from Powell appeared to validate crypto traders who had been anticipating a rate cut. This is evident in the performance of both the crypto and broader risk markets. U.S. stocks and gold also saw gains, with the Nasdaq rising over 1% and the 10-year Treasury yield falling to 4.27%. The U.S. dollar weakened by about 0.5%, further reinforcing the shift in global capital towards risk-on assets. Analysts such as Tom Lee of Fundstrat and The Kobeissi Letter highlighted the significance of Powell’s remarks, noting that they laid the groundwork for a September rate cut and justified the rally in digital assets [1] [3].

Notably, the rally was not limited to Bitcoin. Ethereum, in particular, outperformed other major tokens, gaining nearly 15% in 24 hours and reaching a peak of $4,885 on Coinbase. Institutional interest in Ethereum has been growing, with several firms accumulating ether as part of their treasury strategies. This trend, combined with macroeconomic optimism, has contributed to Ethereum’s 45% year-to-date gain, significantly outpacing Bitcoin’s 25% rise [5] [6]. Altcoins such as Solana (SOLUSD), Dogecoin (DOGE), and Avalanche (AVAX) also saw double-digit gains, with many tapping fresh record highs.

The immediate impact of Powell’s remarks was visible across both traditional and digital markets. In the days leading up to the speech, markets had priced in a low probability of a rate cut. However, the shift in sentiment post-speech caused a rapid repricing of expectations. Traders on platforms like CME FedWatch now assign an 87% probability of a rate cut in September, up from 75% the previous day. This recalibration reflects the broader financial market’s response to a perceived shift in the Fed’s stance [1] [3] [4].

Source:

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

[2] Bitcoin Price (BTC) News: Higher on Powell Jackson Hole (https://www.coindesk.com/markets/2025/08/21/powell-puts-september-rate-cut-in-play-bitcoin-pushes-higher)

[3] Bitcoin Gets A Price Boost From Fed Chair Jerome Powell (https://cointelegraph.com/news/bitcoin-hits-dollar116k-after-fed-s-powell-floats-rate-cut)

[4] New All-Time Highs for BNB and ETH as BTC Jumps After (https://cryptopotato.com/new-all-time-highs-for-bnb-and-eth-as-btc-jumps-after-powell-speech-weekend-watch/)

[5] Ethereum (ETH) Surges to New All-Time High Amid Likely (https://www.coindesk.com/markets/2025/08/22/ethereum-surges-to-new-all-time-high-amid-likely-september-rate-cut)

[6] Ethereum brushes record high after Fed chair says (https://fortune.com/crypto/2025/08/22/ethereum-price-today-bitcoin-jerome-powell-fed-chair-jackson-hole/)