Crypto stocks and digital assets surged Friday after Federal Reserve Chair Jerome Powell signaled that central banks could start interest rate cuts soon in September.
The tone marked a shift after weeks of investor doubt, which has increased the Fed's actions before the end of the year.
Bitcoin BTC$115,244.11 Ether (ETH) moved higher following Powell's remarks, as did the S&P 500 and Nasdaq. The stock, directly linked to the Crypto sector, posted some of the sharpest moves of the day.
At the time of writing, Circle (CRCL) led the puck with a 7% jump. Etoro (ETOR) and Marathon Digital (Mara) rose 6% each, while Coinbase (Coin) rose 5%. MicroStrategy (MSTR), which owns billions of dollars in Bitcoin, rose 4%, while Robinhood (Hood) rose 3%.
The move highlights how crypto assets and stocks are related to US monetary policy expectations. Low interest rates typically ease the financial situation, promote risk-taking, and increase the attractiveness of speculative assets.
US President Donald Trump has repeatedly called on the Fed to facilitate borrowing costs. However, Powell emphasized that inflation risk remains and that the labour market continues to show signs of tension.
Still, he suggested that calculations were evolving. “The balance of risk appears to be changing,” Powell said, adding that while the job's drawing appears to be stable on the surface, “it's a strange balance due to significant slowdowns in both worker supply and demand.”
That careful framing has helped reassure the market that the Fed may be ready to move to cut rates, but is not in a hurry to make a decision. Investors have not been increasing their confidence about the September cuts after a string of stronger economic measurements than expected. Friday's comments brought that possibility back to life.
Read more: Powell puts September rate cut into play. Bitcoin pushes high
