Bitcoin Soars on Fed Hopes, Ethereum Gains Ground in 2025 Rally

The cryptocurrency market witnessed significant movements in late August and early September 2025, with Bitcoin (BTC), Ethereum (ETH), Solana (SOL), Injective (INJ), and Filecoin (FIL) drawing particular attention. As of September 4, 2025, Bitcoin traded at $110,723.60, reflecting a 18.51% increase compared to the previous year. The market cap of Bitcoin reached $2.2 trillion, demonstrating strong institutional and retail investor interest. Analysts highlight that Bitcoin’s price is influenced by macroeconomic factors, particularly the U.S. Federal Reserve's anticipated rate cut in September 2025, which is expected to ease liquidity and potentially weaken the U.S. dollar.

Ethereum, the second-largest cryptocurrency, showed resilience in the same period, with its price reaching $3,680 by mid-September. The ETH/BTC ratio, a key indicator of Ethereum’s relative strength against Bitcoin, experienced a 34% rebound from its April 2025 low. Notably, Ethereum’s market cap stood at $658 billion, accounting for 23.6% of the total cryptocurrency market cap in 2025, up from 21.4% in 2024. Ethereum’s dominance is further supported by its robust DeFi and NFT ecosystems, with over 4.3 million new smart contracts deployed in the first half of 2025.

Solana (SOL) also demonstrated positive performance, with its price and transaction throughput gaining traction as a high-speed alternative to Ethereum. Solana processed over 57% of Ethereum’s Layer 2 volume in 2025, primarily due to its faster block times and lower fees. Injective (INJ), a decentralized exchange platform, saw increased adoption, with its TVL growing significantly as traders and investors moved towards more scalable solutions. Filecoin (FIL), on the other hand, maintained a steady presence in the market, benefiting from the rising demand for decentralized storage solutions.

Market observers remain cautious, given the volatility inherent in the cryptocurrency sector. While Bitcoin’s price appears to be consolidating around key support and resistance levels, Ethereum’s higher volatility index of 4.6% compared to Bitcoin’s 2.1% suggests increased short-term fluctuations. Analysts warn that the first Federal Reserve rate cut in September could trigger a 5–8% pullback in Bitcoin and sharper corrections in altcoins like Solana and Dogecoin. This risk is amplified by the potential for a stagflationary environment, where inflation remains above target while economic growth slows.

Investor sentiment is also influenced by the regulatory landscape. The approval of U.S. Bitcoin and Ethereum ETFs has attracted over $29 billion in institutional inflows in the first half of 2025. These products are expected to contribute further as net inflows reach $48 billion and $28.5 billion for Bitcoin and Ethereum ETFs, respectively, by year-end. Meanwhile, the Ethereum Futures ETF market surged to $11.3 billion in open interest by mid-2025, highlighting growing institutional confidence.

In summary, the cryptocurrency market in late 2025 is characterized by a mix of optimism and caution. Bitcoin’s price remains a focal point, with its technical indicators and macroeconomic factors playing a critical role in near-term trends. Ethereum’s ecosystem-driven growth and Solana’s scalability have solidified their positions in the market, while Injective and Filecoin benefit from niche use cases. As the Federal Reserve prepares to cut interest rates, investors must remain vigilant, balancing exposure to high-risk assets with strategies to mitigate potential volatility.