Crypto Market Boosted by Fed Chair Powell's Rate Cut Hint

The U.S. Federal Reserve's signals of a potential interest rate cut have energized both traditional finance and crypto markets. On Friday, during the annual Jackson Hole summit, Fed Chairman Jerome Powell hinted that the 'balance of risks appears to be shifting,' suggesting a possible adjustment in policy next month. Ethereum skyrocketed by 11.4% to $4,743, while Bitcoin increased by 3.5%, reclaiming the $116,000 mark. Solana and Dogecoin each jumped by 8%, with XRP and BNB rising approximately 5%. In the broader market, TRX was up around 3%, as reported by The Block's price data. Lower interest rates typically encourage investors to pursue higher returns from riskier assets, which often leads to a boost in crypto performance. José Torres, a senior economist at Interactive Brokers, noted, 'Stocks are surging and the yield curve is plunging as Chair Powell points to potential rate cuts around the corner.' The Fed has maintained its benchmark borrowing rate between 4.25%-4.5% since December. Powell seemed to address critiques regarding President Trump's requests for lower rates, stating that the Federal Open Market Committee (FOMC) decisions are made based solely on data assessments and economic outlooks. He emphasized that the Fed will not stray from this principle, despite potential risks from Trump’s tariff policies. In his remarks, Powell reaffirmed the Fed's goal of achieving 2% inflation, highlighting that the recent high inflation rates are not just a temporary issue resulting from the pandemic. He reiterated the central bank's commitment to this target as crucial for maintaining long-term inflation expectations. Equity markets also responded positively, with Ethereum treasury Sharplink (SBET) and Bitemine (BMNR) rising nearly 13%. Coinbase (COIN) and Circle (CRCL) saw gains exceeding 7%. Major crypto mining stocks like MARA and Riot Platforms increased by over 6% for the day, according to The Block's data. Additionally, BlackRock's largest Ethereum ETF, ETHA, surged over 12%, while the iShares Bitcoin Trust gained close to 4%. The Global Markets Complexity Index (GMCI), which tracks over 30 crypto assets, increased by 7.17% as per The Block. Disclaimer: The Block is an independent media outlet dedicated to providing news, research, and data. As of November 2023, Foresight Ventures is a major investor in The Block but does not influence its editorial independence. This article is for informational purposes only and should not be considered financial or investment advice.