Bitcoin and Crypto Stocks Skyrocket as Powell’s Rate-Cut Signal Ignites Risk-On Frenzy

Fed Chair's dovish pivot sends digital assets soaring—traders pile back into crypto amid renewed liquidity hopes.

The Powell Put Is Back

Jerome Powell just handed crypto bulls exactly what they wanted. His hint at impending rate cuts triggered an instant rally across digital assets—Bitcoin ripped higher, mining stocks exploded, and even battered altcoins caught a bid. The market's reading between the lines: easier money is coming.

Risk Assets Reawaken

Traders aren't waiting for the actual cuts—they're front-running the liquidity. Crypto equities like Coinbase and MicroStrategy are leading the charge, with some mining firms posting double-digit gains in a single session. It's the classic 'bad news is good news' playbook—weaker economic data means more Fed support, and crypto feasts on cheap money.

Same Playbook, New Cycle

Watch the institutional flows—they'll tell you everything. Bitcoin ETFs are seeing inflows again after weeks of bleeding, and leverage is creeping back into derivatives markets. The smart money's positioning for a macro regime shift, not just a tactical bounce. Of course, Wall Street will take credit for the rally—they always do—while ignoring the fact they're just following the Fed's lead. Again.

Key Takeaways

• Crypto market traders were positioned for Jerome Powell to be hawkish in a highly anticipated speech, but they were pleasantly surprised as the Fed chief suggested rate cuts could be coming soon.
• Prediction markets bettors now place higher odds of a quarter percentage rate cut in September than they did prior to the speech.
• Bitcoin and proxy stocks such as Strategy and Coinbase also surged as the prospect of lower interest rates revived investors' appetite for risk.

Crypto investors cheered after Federal Reserve Chair Jerome Powell's speech in Jackson Hole on Friday, latching onto the possibility of a rate cut as soon as next month.

Bitcoin (BTCUSD) was trading at around $116,500 recently, up from a low this morning below $112,000. Bitcoin-proxy stocks also gained, with major bitcoin buyer Strategy (MSTR) rising more than 5% and crypto exchange Coinbase (COIN) up nearly 7%. Altcoins including ethereum (ETDUSD) and solana (SOLUSD) also rose.

While the Fed has held rates steady throughout the year, citing a solid jobs market and concerns over tariff-fueled inflation, Powell now seems open to change. "Overall, while the labor market appears to be in balance, it is a curious kind of balance that results from a marked slowing in both the supply of and demand for workers. This unusual situation suggests that downside risks to employment are rising," Powell said in prepared remarks Friday morning. He also said "the shifting balance of risks may warrant adjusting our policy stance."

Fundstrat's Tom Lee took to social media saying: "Fed Powell speech interpreted as 'dovish' as we expected."

Earlier in the week, crypto traders had positioned for an upset, selling U.S. spot bitcoin in anticipation of more-hawkish comments from the Fed chair. Momentum behind the world's largest cryptocurrency returned on the prospect of lower rates spurring investor appetites for risk assets.

Crypto natives' expectations that the Fed WOULD lower its target rate in September had diverged from traditional finance investors' bets prior to the Jackson Hole speech, but now are more in line with them.

As of Friday afternoon, bettors on prediction markets platform Polymarket placed about an 80% chance of a quarter-point cut next month; before the market's open, odds were at 56%. CME FedWatch now shows an 87% probability compared to 75% yesterday.