Amidst the Fed's dovish turn and significant changes in monetary policy, Bitcoin reached a new peak, rising 5% within minutes.
Powell's Key Points
On August 22, 2025, at the Jackson Hole Economic Symposium, Jerome Powell made an important statement that affected financial markets. He announced the possibility of interest rate cuts, opening the door for such moves as early as the September 17–18 meeting. According to him, "the time has come" for policy adjustments, suggesting a 25-50 basis point cut depending on economic data.
Powell emphasized potential risks to the labor market, prompting the Fed to prioritize growth over further cooling of the economy. Before his speech, traders expected an 85-90% probability of a cut, but his words raised that probability to 89% for a 25 basis point cut.
Reasons for Bitcoin's Surge to $117,000
Powell's speech served as a catalyst for Bitcoin's rapid ascent, which rose from $112,000 to $117,000.
* **Instant Growth**: Bitcoin jumped by 5%, leading to $400 million in short liquidations. This created a bullish feedback loop as traders rushed to cover their positions. * **Market Risk Appetite**: Lower interest rates make bonds less attractive, driving capital into more risky assets like cryptocurrencies. Similarly, the Dow surged by 850 points, and altcoins like Ethereum and BNB also saw significant gains. * **Institutional Investments**: On the same day, Bitcoin ETFs observed $150 million in net inflows, contributing to price increases.
Crypto Market Reaction to Fed Policy Shift
Powell's dovish stance positively affected not only Bitcoin but the entire crypto market.
* **Altcoin Surge**: Ethereum rose 7-9%, XRP reached $3.04, and BNB set a new record above $882. The total crypto market cap returned to $4.1 trillion, up 4%. * **Market Sentiment**: The Fear & Greed Index switched to "Greed," indicating renewed optimism among investors. Some analysts predict Bitcoin could reach $120,000 to $125,000 if anticipated cuts occur.
The Fed's dovish turn and Jerome Powell's speech served as a catalyst for the Bitcoin surge to $117,000. With increased institutional investments and the growth of altcoins, the crypto market exhibits strong dynamics but remains susceptible to risks and volatility.
