Amir | Data Analyst

Chairman Powell's dovish remarks at the Jackson Hole central bank conference sent the crypto market into a frenzy, with Bitcoin rebounding to $116,000 and Ethereum surging nearly 10% in a single day. This liquidity feast is just beginning.

On August 22, Eastern Time, Federal Reserve Chairman Powell delivered a speech at the Jackson Hole Global Central Bank Conference, suggesting for the first time that the Fed may adjust its policy stance, noting the rising downside risks to employment and that changes in risk balance may require policy adjustments.

This statement immediately triggered a strong reaction in the cryptocurrency market: Bitcoin surged from $112,000 to $114,700, while Ethereum jumped from $4,300 to $4,600, with a daily increase of up to 9.11%.

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01 Key Points from Powell's Speech

Powell's speech marks a potential shift in Federal Reserve policy. He made it clear: 'The stability of the unemployment rate and other labor market indicators allows us to cautiously consider adjustments to our policy stance.'

Although he mentioned that tariff-driven price pressures could stimulate persistent inflation, this possibility is low given the downside risks in the labor market.

The Federal Reserve also released a revised statement on its (long-term goals and monetary policy strategy), eliminating the 'average inflation targeting' and returning to flexible inflation targeting. This shift aims to address ongoing inflation risks while balancing the interest rate cut demands of the Trump administration.

02 Market Immediate Reaction

The cryptocurrency market reacted swiftly and strongly to Powell's speech. Not only did Bitcoin and Ethereum surge significantly, but other major tokens also followed suit:

- Solana (SOL): $193, up 5.44%

- XRP: $3, up 4.70%

- BNB: $878, up 3.91%

- Cardano (ADA): $0.90, up 5.04%

This surge reversed the previous cautious sentiment in the market. Before Powell's speech, the cryptocurrency market had seen a significant pullback, with Bitcoin dropping below $114,000 and Ethereum falling below $4,200.

03 Bitcoin Future Trend Prediction

Multiple institutions hold an optimistic view on Bitcoin's future. Tiger Research set a target price of $190,000 in its Q3 2025 Bitcoin valuation report, based on record global liquidity and accelerated institutional adoption.

VanEck is also optimistic about Bitcoin's prospects, predicting that Bitcoin's price will reach $180,000 by the end of 2025. Their report notes that Bitcoin network transaction volume has increased by 34% in the past 30 days, with mining power reaching a record high of 902 EH/s.

The positive outlook for Bitcoin prices is primarily built on three pillars: expanding global liquidity, accelerating institutional capital inflows, and a cryptocurrency-friendly regulatory environment.

04 Ethereum Future Trend Analysis

Ethereum's performance may continue to outperform Bitcoin. The ETH/BTC ratio has reached a 2025 high as Ethereum ETFs have seen historic inflows.

Corporations and other institutional treasuries now hold over 2% of the total Ethereum supply. This trend indicates that Ethereum is gaining favor with institutional investors, which may provide further support for its price.

Ethereum's strong fundamentals also support a bullish outlook. As Ronin migrates from an independent sidechain to Ethereum's second-layer rollup, transaction data will align with Ethereum's settlement layer, reflecting a broader shift from L1 to the Ethereum rollup ecosystem.

05 Potential Risks and Challenges

Despite the optimistic outlook, the cryptocurrency market still faces multiple risks. The uncertainty of the Fed's policy shift is one of the main concerns.

Several regional Fed presidents conveyed a cautious attitude during the Jackson Hole conference. Cleveland Fed President Mester stated that inflation pressures have not abated and there is no immediate justification for a rate cut.

On-chain indicators also show some overheating signals. The MVRV-Z metric (which measures the current price relative to the average cost basis of investors) stands at 2.49, in the overheating zone, having recently spiked to 2.7, warning of a possible short-term correction.

Additionally, the Trump administration's tariff policies continue to disrupt the global economy and international trade relations, which could cause fluctuations in Bitcoin prices.

06 Investment Recommendations and Strategies

In the short term, investors should closely monitor the Fed's decision in September. According to CME's FedWatch Tool data, the market currently expects a 75% probability of a 25 basis point rate cut by the Fed in September.

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Bitcoin's mining power has reached a historic high of 902 EH/s, with American miners holding 31% of the global market share, indicating that the Bitcoin network's foundation is becoming more robust.

Institutions are reshaping the Bitcoin market landscape — the daily transaction count decreased by 41% from 660,000 in October 2024 to 388,000 in March 2025, but the value per transaction has significantly increased. This marks Bitcoin's shift from a 'small frequent' to a 'large infrequent' trading model.

The Federal Reserve's shift in monetary policy is just the beginning; a true institution-driven bull market may still be ahead.