Bitcoin price pops and Ethereum jumps 7% as Powell speech buoys crypto markets

Cryptocurrencies reacted sharply to Federal Reserve chair Jerome Powell’s speech at Jackson Hole, with Bitcoin jumping above $115,000 and Ethereum surging more than 8% to above $4,600.

After a week of downside action, Bitcoin (BTC) and Ethereum (ETH) led the cryptocurrency market in a sharp rally on Friday, with the broader market rallying as Fed chair Jerome Powell hinted at potential interest rate cuts in September.

With the Dow Jones Industrial Average jumping more than 850 points, Bitcoin spiked nearly 3% to trade near $116,000, while Ethereum rose more than 8% to break above $4,600.

What did Powell say?

As investors cheered Powell’s speech at Jackson Hole, the global crypto market gained 2.5% to over $3.95 trillion. The gains also triggered a surge in liquidations, which climbed 85% to over $585 million as the sudden price spike caught shorts off guard.

Powell’s speech at the central bank’s annual symposium in Wyoming was a highly anticipated event. While the Fed chair did not explicitly state that a rate cut is coming in September, his remarks provided a strong hint.

In particular, Powell said current conditions ‘may warrant’ the central bank’s move to cut interest rates. 

The remarks now see investors increase bets on a rate cut in September, with the CME FedWatch tool now reading 90%. 

Powell also signaled that the Fed wants to move away from its framework requiring it to target inflation strictly at 2%. With these details in place, crypto and other risk assets are likely to continue higher.