Key insights:
Ethereum has surged by over 250% from its April lows.
Fed Chair Jerome Powell’s dovish comments are driving the ETH price surge.
Bitcoin’s market dominance has dipped below 60% for the first time since March.
Ether (ETH), Ethereum’s native token, achieved a new all-time high on Friday, surpassing $4,867 on Coinbase for the first time since November 2021.
ETH price has climbed 250% since April
On Friday, ETH rose by approximately 14% as Federal Reserve Chair Jerome Powell increased the likelihood of a 25 basis point interest rate cut in September. This brought ETH’s increase to over 250% compared to its April low of $1,385.
“The stability of the unemployment rate and other labor market indicators allows us to proceed cautiously as we evaluate potential policy changes,” Powell stated during his address at the Jackson Hole symposium on Friday, adding:
“However, given that policy is in restrictive territory, the baseline outlook and shifting risks may necessitate adjustments to our policy stance.”
Powell’s dovish outlook suggests looser liquidity on the horizon, which typically enhances demand for risk assets like Ethereum.
ETH DATs are accumulating, and Powell adopts a dovish stance
The Ether market is benefiting from renewed investments into US-based ETFs. On Aug. 21, these funds attracted $287.60 million in capital after experiencing four consecutive days of outflows.
As of Friday, Ether ETFs collectively managed assets exceeding $12.12 billion.
Ethereum also sees significant momentum with increased corporate ETH treasury adoption.
In the past month, corporate Ethereum treasury firms have acquired approximately $1.6 billion in ETH, with BitMine, SharpLink, Bit Digital, BTCS, and GameSquare among the most active purchasers.
As of Friday, these holdings had ballooned to over $29.75 billion, according to data from StrategicETHReserve.xyz.
Ether is increasingly regarded as a utility-rich reserve asset rather than merely a speculative token, according to Ray Youssef, CEO of finance app NoOnes.
Standard Chartered has raised its year-end ETH price target to $7,500 from $4,000, expecting it to reach $25,000 by 2028. Some analysts predict the ETH price may hit $13,000 in the forthcoming months.
According to analysts at Hyblock, demand for ETH is likely to continue exceeding its available supply. They remarked,
“Typically, when you reach these all-time high levels (psychological levels), you see early adopters from 2012-2015 selling, and if that supply isn’t met by genuine demand, it creates market tops. We’ve witnessed this in past price peaks, but currently, even if that supply is present, there’s real demand to absorb it. ETH inflows, treasury companies (BNMR, SharpLink, etc.), along with the tailwinds from the Genius Acts on Ether, DeFi, and stablecoins have created an optimal situation right now.”
Decline in Bitcoin dominance signals onset of “altseason”
The ETH rally has coincided with a noticeable decrease in Bitcoin’s market dominance.
As of Wednesday, Bitcoin’s share of the total cryptocurrency market capitalization fell below 60% for the first time in four months. At its yearly peak, BTC (BTC) commanded 66% of the crypto market share.
This shift indicates a rotation of capital into altcoins, particularly larger caps like Ether, as traders and institutions pursue higher returns.
The inflows into Ether products also reflect bullish sentiment towards ETH in the marketplace.
Ethereum-focused investment products attracted $2.86 billion in the week ending Aug. 15, compared to Bitcoin’s $552 million inflows during the same timeframe, according to CoinShares’ weekly report.
In terms of month-to-date performance, ETH fund holdings have increased by over $2.96 billion, whereas BTC products recorded $21 million in outflows.
This article does not offer investment advice or recommendations. Every investment and trading decision carries risk, and readers should conduct their own research before making any decisions.
