In this rally’s case, a rising tide did indeed lift all boats.
Cryptocurrency markets skyrocketed into new territory Friday after Federal Reserve Chair Jerome Powell signaled that interest rate reductions could be imminent, pushing the Dow to its first 800-point plus gain this year. That ended the Dow’s longest streak without a new high since Dec. 4, 2024, according to Dow Jones Market Data, and signaled a major surge of optimism at the prospect of some economic policy relief.
Cryptos were major stars of that rally.
Ethereum (ETH) climbed over 15% to reach a new all-time high of $4,885, surpassing its previous record from November 2021, while Solana (SOL) swung between 8% and 12.5% in a 24-hour period, nudging just past the longtime “psychological” mark of $200 for a high of $201.94. Bitcoin (BTC) lovers also had their moment when it climbed 2.5% to $114,700 from $112,000, clawing back some of its losses from earlier this week.
As cryptocurrencies and stocks soared, the probability of a September Fed rate cut jumped to 90% following the speech, Reuters reports.So why all the enthusiasm?
Simply put: When the market feels more secure, it invests in places considered riskier bets. Cryptocurrencies and other fintechs that are part of emerging technology sit squarely in those crosshairs.
This time it appears institutional investors led the charge, as they look for investments that can balance out a shaky U.S. dollar, general volatility, and risk.
“It’s almost a relief rally,” Carol Schleif, chief market strategist at BMO Private Wealth, told the Wall Street Journal. “Markets had anticipated more angst.”
The optimism from the market is a sign monetary easing is a reversal of that angst, and could be a change in fortune for the sector, which has whipsawed in recent trading, said Steve Lee, co-founder and managing partner at Neoclassic Capital and investor in BlockTower Capital.
“I see this as constructive in the short term, and it may help reverse this week’s sell-off.
