Cryptocurrency Ethereum (ETH) has hit its first new all-time high since 2021 after U.S. Federal Reserve Chair Jerome Powell indicated that interest rates are likely to move lower in coming months.
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The second-largest cryptocurrency by market capitalization soared 15% on Aug. 22, rising as high as $4,885.00 and surpassing its previous record high of $4,866.01 reached in November 2021. Bitcoin (BTC), the biggest crypto, gained 4% on the day to trade as high as $117,008.29.
Cryptocurrencies enjoyed a big rally after Fed Chair Powell delivered his annual address from Jackson Hole, Wyoming, and said that “With policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance.” Markets took that as a sign that interest rates will decline in the coming months.
Risk On
Crypto rallied alongside stocks after Powell’s comments, with the Dow Jones Industrial Average gaining more than 800 points and closing at an all-time high. Just after the Fed Chair’s speech, ETH saw about $120 million in short liquidations in a one-hour period as traders who had shorted the cryptocurrency were forced to quickly close out their positions.
ETH has been the best-performing cryptocurrency this summer, outperforming Bitcoin. Since the end of June, Ethereum’s price has nearly doubled as investors turn bullish on the digital asset. The price momentum has also been driven by strong flows into exchange-traded funds and institutional buying. Corporations have also begun to add ETH to their balance sheets as part of a crypto treasury strategy.
Is ETH a Buy?
Most Wall Street firms don’t offer ratings or price targets on cryptocurrencies such as Ethereum, so we’ll look instead at its three-month performance. As one can see in the chart below, the price of ETH has risen 62.51% in the last 12 weeks.
