Ethereum News Today: Ethereum’s Surge Driven by Fed Signals and Institutional Bet

Ethereum (ETH) reached an all-time high of $4,867 on Coinbase on Friday, surpassing its previous record set in November 2021, driven by a dovish stance from the Federal Reserve and renewed institutional demand for the cryptocurrency. This price surge represents a more than 250% increase from its April lows at $1,385. Analysts attribute the momentum to expectations of a 25 basis point rate cut in September, as outlined by Federal Reserve Chair Jerome Powell during his speech at the Jackson Hole symposium. Powell’s remarks emphasized a careful approach to adjusting the Fed's policy stance, citing “shifting balance of risks” and the need to manage potential downside risks in the labor market. The signal for looser monetary policy has traditionally been bullish for risk assets such as Ethereum, which has historically shown strong correlations with liquidity trends in global markets.

The ETH price surge coincided with a notable shift in capital allocation across the cryptocurrency sector. Bitcoin’s market dominance dropped below 60% for the first time in four months, indicating a growing interest in altcoins like Ethereum as investors seek higher returns. This trend was further reinforced by strong inflows into Ethereum-based products. U.S. spot Ethereum ETFs attracted $287.60 million in capital on August 21, ending a streak of outflows, and collectively managed over $12.12 billion in assets as of Friday. This marks a significant reversal in fund flows, as Ethereum-focused investment products outperformed Bitcoin ETFs in the week ending August 15, with $2.86 billion in inflows compared to Bitcoin’s $552 million.

Institutional adoption of Ethereum has also contributed to the token’s recent strength. Over the past month, corporate entities have acquired roughly $1.6 billion worth of ETH, bringing total corporate holdings to over $29.75 billion, according to StrategicETHReserve.xyz. Prominent firms, including BitMine, SharpLink, Bit Digital, BTCS, and GameSquare, have been active in building ETH treasuries. These corporate buying trends mirror earlier patterns seen in Bitcoin treasury strategies, where companies have increasingly turned to cryptocurrency as a reserve asset. Ether’s utility within the DeFi ecosystem and its role as a settlement layer for stablecoins have further cemented its value proposition, particularly in contrast to other major blockchains like Solana.

Analysts remain bullish on Ethereum’s long-term potential, with Standard Chartered revising its year-end ETH price target to $7,500 from $4,000, while also projecting a target of $25,000 by 2028. Some market participants even speculate that ETH could reach $13,000 in the coming months, driven by sustained demand outpacing supply and favorable macroeconomic conditions. Hyblock analysts note that current market dynamics are creating a “perfect storm,” citing strong ETF inflows, treasury buying, and favorable conditions in DeFi and stablecoin growth. Unlike previous price tops, current supply-side pressures are being met with robust demand, suggesting a different market environment than in past cycles.

Despite the bullish momentum, the Federal Reserve has emphasized caution, acknowledging the delicate balance between managing inflation and supporting employment. Powell described the labor market as being in a “curious balance,” where both supply and demand for workers have slowed without a corresponding increase in unemployment. This dynamic has raised concerns about potential instability, as Powell highlighted the risk of a sudden shift leading to increased layoffs and higher unemployment. The upcoming September employment and inflation reports will be critical for the Fed’s decision-making process, with market participants currently pricing in an 85% probability of a 25 basis point rate cut in September.

Source: [1] ETH Soars To New All-time High On Fed Rate Cut Signal (https://cointelegraph.com/news/eth-hits-new-highs-as-fed-turns-dovish-ether-etf-inflows-resume) [2] 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) [3] Ethereum Hits All-Time High Price After Nearly 4 Years (https://finance.yahoo.com/news/ethereum-hits-time-high-price-213405633.html) [4] Powell hints at long-awaited rate cut but admits Fed in ' ... (https://www.pbs.org/newshour/show/powell-hints-at-long-awaited-rate-cut-but-admits-fed-in-challenging-situation) [5] Powell says Fed may need to cut rates, will proceed carefully (https://www.reuters.com/markets/wealth/powell-says-fed-may-need-cut-rates-will-proceed-carefully-2025-08-22/) [6] Federal Reserve set to cut interest rates – but still Trump ... (https://www.theguardian.com/business/2025/aug/22/federal-reserve-trump-rate-cuts) [7] Getting ETH Exposure in 2025: Ether Near Record Highs ... (https://www.coindesk.com/markets/2025/08/24/getting-eth-exposure-in-2025-ether-near-record-highs-tom-lee-can-see-usd15k-by-year-end)