Crypto stocks rallied sharply after Federal Reserve Chairman Jerome Powell hinted that interest rate cuts might begin as early as September, fueling optimism across digital asset markets. The suggestion of potential easing sent a wave of bullish sentiment through both equities and cryptocurrencies.

Fed’s Shift Ignites Momentum in Crypto and Tech

After weeks of uncertainty over the Federal Reserve’s interest rate policy, Powell’s new remarks marked a clear shift in tone. His statement rekindled hopes among investors that the Fed is leaning toward monetary easing before year’s end. As a result, major indices and digital assets surged in tandem.

Bitcoin (BTC) and Ethereum (ETH) rose notably following Powell’s comments. The tech-heavy Nasdaq and S&P 500 also closed higher, underscoring how closely traditional markets are aligned with crypto sentiment amid macroeconomic shifts.

Biggest Crypto Gainers of the Day

Among the standout performers, Circle (CRCL) led with a 7% spike in share value. eToro (ETOR) and Marathon Digital (MARA) followed, each gaining 6%. Coinbase (COIN) advanced 5%, while MicroStrategy (MSTR), a public company with significant Bitcoin holdings, saw a 4% climb. Meanwhile, Robinhood (HOOD) added 3%.

This strong performance emphasizes how crypto-affiliated firms are especially sensitive to shifts in monetary policy and investor appetite for risk. When borrowing costs decline, speculative sectors like digital finance and fintech often benefit significantly.

Interest Rates and Risk Appetite

The prospects of lower interest rates typically result in looser financial conditions, giving rise to more investment into risk-on assets such as cryptocurrencies. This relationship has become more evident over recent years as institutional and retail investors pile into digital assets during dovish economic periods.

Powell acknowledged some of the lingering macroeconomic risks, stating that inflation remains a concern and signs of labor market attrition are still present. However, his recognition of a changing macro environment brought renewed optimism to the market.

Powell’s Balanced Framing Reassures Investors

Powell’s phrasing was careful, noting that “the balance of risks appears to be shifting,” referencing a slowdown in both labor supply and demand. Although Powell stressed that the Fed won’t rush a rate cut, his tone helped restore some faith in a September policy shift. This improved investor sentiment, which had wavered after stronger-than-expected economic data earlier in the month.

The hope of a near-term rate cut suggests that crypto markets could see extended momentum if such a policy change materializes.

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Powell Puts September Rate Cut in Play; Bitcoin Pushes Higher