Crypto Markets Soar as Powell Signals Rate Cuts; Ether Eyes $5K, Bitcoin Near Record
August 23, 2026 – Digital assets rallied sharply late Friday after Federal Reserve Chair Jerome Powell adopted a dovish tone at the Jackson Hole economic symposium, surprising markets expecting a more hawkish approach. The remarks boosted confidence across risk assets, with analysts predicting new record highs for bitcoin (BTC), ether (ETH), and major altcoins.
Powell’s Pivot Sparks Bullish Momentum
In his keynote, Powell acknowledged that the labor market is showing signs of strain and hinted at the need for lower borrowing costs.
“Downside risks to employment are rising,” Powell stated. He also described the inflationary impact of President Trump’s tariffs as “likely short-lived,” adding that current restrictive policies may soon warrant a shift.
Following the speech, market expectations for a September rate cut jumped to 90%, triggering a widespread rally in crypto and equity markets.
Ether Outpaces Market, Breaks New Highs
Ethereum surged nearly 10% in 24 hours, topping $4,800 and leading the market gains. Bitcoin, meanwhile, traded near $115,600, slightly below its overnight high of $117,400.
Sam Gaer, CIO at Monarq Asset Management, sees a breakout coming:
“Powell’s shift paves the way for ETH to move past $5,000. We’re seeing strong market internals, growing institutional inflows, and elevated treasury interest,” he told CoinDesk.
Derivatives markets echoed the optimism, with ETH call options in high demand and positive risk reversals across all maturities. BTC options were less aggressive, though signs of strength remain.
BTC Demand Resilient Despite Pullback
While ether dominated short-term flows, bitcoin remained firm. Gaer noted:
“BTC’s recent pullback was only ~9.6% from its all-time high — much shallower than prior corrections. Whale wallets have been accumulating around $113K, showing underlying strength.”
Rate Cuts Expected to Extend Crypto Momentum
Spencer Yang, Managing Partner at BlockSpaceForce, said the September cut could be the first in a series:
“With Trump now in office and the Fed pivoting, we expect more cuts ahead. The top five assets — BTC, ETH, BNB, SOL, and LINK — are poised to benefit.”
Spot ETF Flows Now in Focus
Steve Lee, Co-Founder at Neoclassic Capital, said short-term momentum is promising, but sustained gains depend on ETF flows:
“ETF activity today and Monday will be a litmus test. BTC and ETH pricing is now institutionally driven, and continued inflows are critical.”
Lee is also watching early-stage networks like Base, Monad, Story, and SUI, while Gaer remains bullish on Solana’s ecosystem, including JITO, JUP, Raydium, and PUMP.
Caution Over DAT Structures and Equity Volatility
Despite the bullish setup, analysts warned of risks. Lee highlighted concerns around deteriorating quality in Digital Asset Treasuries (DATs):
“Some recent DAT deals show weak compliance, banking, and structure. It’s starting to resemble a bubble.”
Corporate BTC adoption, kicked off by Strategy in 2020, has led over 100 public companies to collectively hold 984,971 BTC, per Bitcoin Treasuries. But the model’s scalability and risk profile remain in question.
Gaer added that macro volatility and geopolitical shocks could also derail the rally, even as momentum builds.
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