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Why Ether Just Hit a New Record After Powell’s Jackson Hole Speech

Ether (ETH) just broke its all-time high, fueled by Powell’s dovish Jackson Hole comments, a massive short squeeze, and Ethereum’s growing role in stablecoins and DeFi. Here’s a deep dive into why ETH is outperforming Bitcoin and what it means for investors.

By admin
4 min read
Why Ether Just Hit a New Record After Powell’s Jackson Hole Speech

On Friday, Ether (ETH) surged to a new all-time high of $4,885, surpassing its November 2021 record of $4,866. The move came shortly after Federal Reserve Chair Jerome Powell’s Jackson Hole speech, where he hinted that conditions “may warrant” interest rate cuts.

The rally caught traders off guard and triggered massive short liquidations, cementing Ether’s leadership role in the crypto market. But why exactly did this happen, and what does it mean for investors? Let’s break it down.

Powell’s Dovish Tone Sparks Risk-On Appetite

For months, markets have been weighed down by restrictive Fed policy. Higher rates make borrowing more expensive and typically hurt risk assets like tech stocks and crypto.

Powell’s Jackson Hole speech signaled a potential shift:

“With policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance.”

In simple terms, the Fed may be preparing to cut interest rates as early as September. This matters because:

  • Lower rates → cheaper money → more liquidity.
  • Investors tend to rotate into riskier, higher-growth assets, including crypto.
  • Historically, Fed pivots toward easing have triggered powerful rallies in equities and digital assets.

Short Squeeze Accelerates the Move

The surprise dovish tone caused chaos in trading desks. Many traders were positioned bearish on crypto after a recent pullback.

  • According to CoinGlass, ETH saw $120 million in short liquidations within one hour.
  • When shorts are liquidated, traders are forced to buy back ETH, which pushes the price even higher.
  • This created a feedback loop, fueling a rapid surge past Ether’s 2021 record.

What started as a macro-driven rally quickly turned into a technical breakout.

Ethereum’s Growing Fundamentals

Beyond the Fed’s policy shift, Ether’s rally is also backed by strong fundamentals that differentiate it from Bitcoin:

  1. Stablecoin Dominance

    • 40% of all blockchain fees come from stablecoin activity.
    • More than half of stablecoins operate on Ethereum, making ETH the backbone of digital finance.

  2. Institutional Adoption

    • Recent U.S. initiatives like the GENIUS Act and SEC’s Project Crypto have increased confidence in Ethereum’s regulatory future.
    • Large financial institutions are exploring ETH-based infrastructure for payments and tokenization.

  3. Narrative Shift

    • Analysts like Tom Lee of Fundstrat call Ether the “biggest macro trade over the next 10 to 15 years.”
    • Stablecoins are being described as crypto’s “ChatGPT moment” — mass adoption that brings blockchain into mainstream finance.

Market Reactions Beyond Ether

The ripple effects spread quickly:

  • Bitcoin (BTC) rose 4% to over $117,000, though it lagged Ether’s performance.
  • Crypto stocks jumped: Bitmine Immersion (+12%), SharpLink Gaming (+15%), and Coinbase (+6%).
  • ETH-focused companies were more volatile: Peter Thiel-backed ETHzilla dropped 31% after a large share resale announcement.

Meanwhile, Solana-focused DeFi Development surged 21%, showing that investor appetite extended across the crypto ecosystem.

What This Means for Investors

Ether’s breakout illustrates the powerful intersection of macro policy shifts and crypto fundamentals.

  • Short-term: The September Fed meeting will be pivotal. If Powell follows through with cuts, crypto momentum could continue. Expect high volatility as traders reposition.
  • Medium-term: Ethereum’s role as the backbone of stablecoins gives it stronger adoption tailwinds than Bitcoin.
  • Long-term: Institutional adoption and regulatory clarity may solidify Ether as a cornerstone asset in the digital economy.

Final Thoughts

Ether didn’t just break a record because of Powell’s comments — the Fed’s dovish tone was the spark, but Ethereum’s fundamentals provided the fuel.

  • Macro easing brought traders back into risk assets.
  • A short squeeze turbocharged the move.
  • Stablecoin growth and institutional adoption are creating a strong foundation for Ethereum’s future.

For investors, the message is clear: Ethereum is not just another cryptocurrency — it’s increasingly the backbone of blockchain finance.

👉 Explore more insights on trending crypto and stocks at Sirius Investors.

Disclaimer: This article is for informational purposes only and should not be considered financial advice. Always conduct your own research before making investment decisions.