Key insights:
Ethereum has surged over 250% from April’s lows.
Fed Chair Jerome Powell’s dovish remarks are driving the ETH price increase.
Bitcoin’s dominance in the crypto market has fallen below 60% for the first time since March.
Ethereum’s native token, Ether (ETH), achieved a new all-time high on Friday, exceeding $4,867 on Coinbase for the first time since November 2021.
Ether price rises 250% since April
ETH experienced a spike of around 14% on Friday, coinciding with Federal Reserve Chair Jerome Powell’s indication of a potential 25 basis point interest rate cut in September. This results in ETH’s gains surpassing 250% compared to its April low of $1,385.
“The stability of the unemployment rate and other labor market indicators allows us to cautiously consider adjustments to our policy stance,” Powell noted during his address at the Jackson Hole symposium, adding:
“However, as policy remains in restrictive territory, the baseline outlook and changing balance of risks may necessitate adjustments to our policy approach.”
Powell’s dovish stance suggests an environment of increased liquidity, which typically enhances demand for risk assets like Ethereum.
ETH DATs continue to stack, and Powell adopts a dovish stance
Ether markets are benefiting from renewed investments in US-based ETFs. On Aug. 21, these funds attracted $287.60 million, following four days of outflows.
As of Friday, Ether ETFs were managing over $12.12 billion in assets.
Ethereum is also gaining traction through increased ETH treasury adoption in corporations.
Over the past month, corporate Ethereum treasury firms have acquired around $1.6 billion worth of ETH, with companies like BitMine, SharpLink, Bit Digital, BTCS, and GameSquare among the top purchasers.
As of Friday, these holdings have expanded to over $29.75 billion, according to data from StrategicETHReserve.xyz.
Ether is increasingly regarded less as a speculative asset and more as a utility-rich reserve asset, according to Ray Youssef, CEO of finance app NoOnes.
Standard Chartered has adjusted its year-end ETH price target to $7,500 from $4,000 and predicts $25,000 by 2028. Some analysts believe ETH could reach $13,000 in the near future.
Analysts at Hyblock suggest that market demand for ETH will likely continue to outstrip supply. They stated,
“Traditionally, when reaching all-time high levels (psychological levels), we see early adopters from 2012-2015 selling, and if that selling/supply isn’t matched with real demand, it leads to price peaks. We witnessed this in past price tops, but currently, even with existing supply, there is actual demand to absorb it. ETH inflows, treasury companies (BNMR, Sharplink, etc.), combined with the tailwinds from the Genius Acts on Ether, DeFi, and stablecoins have created a perfect storm at this moment.”
Decline in Bitcoin dominance signals “altseason”
The rise in ETH has coincided with a significant decline 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) held 66% of the crypto market share.
This shift indicates capital rotation towards altcoins, particularly large-cap assets like Ether, as traders and institutions pursue better returns.
Fund flows into Ether are also displaying positivity in the market.
Ethereum-focused investment products drew $2.86 billion in the week ending Aug. 15, outpacing Bitcoin’s $552 million inflows during the same timeframe, according to CoinShares’ weekly report.
Throughout the month, ETH fund holdings have increased by over $2.96 billion, whereas BTC products recorded $21 million in outflows.
This article does not provide investment advice or recommendations. All investments and trading decisions carry risks, and readers should conduct their own research before making choices.
