Ethereum Sets New All-time High on Fed Rate Cut Signal
Ethereum’s native token ether (ETH) surged to a new record high on Friday, climbing above $4,867 on Coinbase for the first time since November 2021. The token’s price has risen more than 250% since April, when it was trading at $1,385. ETH jumped roughly 14% on Friday as Federal Reserve Chair Jerome Powell increased the likelihood of a 25 basis point interest rate cut in September.
“The stability of the unemployment rate and other labor market measures allows us to proceed carefully as we consider changes to our policy stance,” Powell said during his Jackson Hole speech, adding, “Nonetheless, with policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance.”
His remarks were seen as dovish, suggesting looser liquidity conditions that typically support demand for risk assets like Ethereum.
ETF inflows and corporate adoption boost ETH
Ether markets are also benefiting from renewed inflows into U.S.-based ETFs. On August 21, ETH funds saw $287.6 million in inflows following four straight days of outflows. As of Friday, Ethereum ETFs collectively managed more than $12.12 billion in assets.
Corporate treasuries have also been accumulating ETH aggressively. In the past month, firms acquired about $1.6 billion worth, bringing their combined holdings to over $29.75 billion, according to StrategicETHReserve.xyz. Ray Youssef, CEO of finance app NoOnes, noted that Ether is being viewed increasingly as a utility-rich reserve asset rather than just a speculative token. Standard Chartered raised its year-end ETH target to $7,500, projecting $25,000 by 2028.
Some analysts see a possible near-term climb to $13,000. Analysts at Hyblock argued that demand continues to outpace supply, saying, “Usually, when you get to these all-time high levels (psychological levels), you see OGs from 2012-2015 selling, and if that selling/supply isn’t met with real demand, it forms tops. We sort of saw this in the previous price tops, but right now, even if that supply does exist, there is real demand to gobble that up. ETH inflows, treasury companies (BNMR, Sharplink, etc.), along with the Genius Acts’ tailwinds on Ether, DeFi and stablecoins have created a truly perfect storm right now.”
Bitcoin dominance weakens as altcoins gain
Rally on Ethereum has coincided with a decline in the market share of Bitcoin. Bitcoin’s dominance of total crypto market capitalization fell below 60% for the first time in four months, down from a yearly high of 66%. The shift signals capital rotation into altcoins like ETH as traders and institutions search for higher returns.
Fund flows reflect the trend: Ethereum-focused products attracted $2.86 billion in the week ending August 15, compared with $552 million for Bitcoin. On a month-to-date basis, ETH fund holdings have grown by more than $2.96 billion, while Bitcoin products recorded $21 million in outflows.
Sources:
https://cointelegraph.com/news/eth-hits-new-highs-as-fed-turns-dovish-ether-etf-inflows-resume
https://blog.coinshares.com/volume-247-digital-asset-fund-flows-weekly-report-a920b64cc229