Although initial market sentiment had been marked by skepticism regarding monetary easing in 2025, Bitcoin and Ethereum experienced pronounced rallies following the Federal Reserve’s indication of a potential interest rate cut, underscoring the cryptocurrencies’ heightened sensitivity to shifts in U.S. monetary policy. Bitcoin, in particular, surged to a new all-time high of $124,000 on August 14, 2025, after rebounding from approximately $112,000 earlier in the month. This peak was followed by a typical market correction, with prices retreating to around $114,000, reflecting profit-taking and market normalization after the strong upward momentum. Kaspa (KAS), a blockchain utilizing a BlockDAG structure, exemplifies innovations targeting scalability and transaction speed in the crypto space.
Bitcoin surged to $124,000 after Fed hints at rate cuts, then corrected to $114,000 amid profit-taking.
Institutional interest played a significant role in underpinning Bitcoin’s price trajectory. CME basis funding rates climbed to 9%, a level unseen since February 2025, highlighting the growing speculative appetite among institutional traders. Moreover, exchange-traded products (ETPs) and Digital Asset Treasuries added over 126,000 BTC in July alone, bolstering liquidity and demand. The robust domestic mining infrastructure, as evidenced by the U.S. share of the global Bitcoin miner hashrate reaching 31.5%, adds a layer of stability and confidence in the network during this period of price expansion.
Ethereum exhibited parallel strength, briefly touching a historic high near $4,800 on August 22, 2025. The price forecast for August anticipated trading between $4,285 and $4,800, with an average near $4,535, reflecting a 60% gain over three months and 28% year-to-date. Despite a short-term correction of approximately 10% before mid-August, attributed to profit-taking, analysts remain optimistic about Ethereum’s prospects. Tight exchange supply and significant ETH staking, which reduces liquid availability, are expected to support upward price pressure, potentially enabling breaks above previous highs. Furthermore, Ethereum’s circulating supply of approximately 120.7 million ETH continues to influence its market dynamics and price stability. Additionally, U.S. spot Ethereum ETFs attracted institutional inflows exceeding $3 billion in August 2025, underscoring growing investment confidence.
The Federal Reserve’s signals catalyzed a broader risk-on sentiment, with cryptocurrencies responding more vigorously than many traditional assets. Reduced interest rates lower the opportunity cost of holding non-yielding assets like Bitcoin and Ethereum, attracting renewed institutional demand through ETFs and futures markets. This dynamic not only highlights crypto’s evolving role within diversified portfolios but also underscores ongoing uncertainties about the interplay between monetary policy and digital asset valuations.
