Ethereum Reaches New High Amidst Institutional Buying, Rate Cut Expectations
Ethereum (ETH) surged to a record high of $4,946 before retracing to $4,631, as institutional investors continue to accumulate the cryptocurrency and markets anticipate potential interest rate cuts by the Federal Reserve.
According to Glassnode, Ethereum’s Market Value to Realized Value (MVRV) ratio has risen to 2.15, indicating that investors are holding, on average, over 2.15 times their initial investment in unrealized gains. Analysts at Glassnode pointed out that this level is similar to market conditions observed in March 2024 and December 2020, both of which where followed by periods of increased market volatility and profit-taking.
The recent price increase coincided with substantial purchases by BitMine,which reportedly spent $800 million last week increasing its Ethereum holdings. As of a press release on Monday, BitMine holds over 1.7 million ETH,192 Bitcoin (BTC),and $562 million in unencumbered cash. The company’s treasury makes it the largest ETH holder globally and the 20th most liquid US stock, trading an average of $2.8 billion per day.
Meanwhile, MicroStrategy, led by Michael Saylor, continued its bitcoin acquisition strategy, adding 3,081 BTC to its reserves, bringing its total holdings to 632,457 BTC.
Federal Reserve Signals Potential Rate Cut
During the Jackson Hole Economic Policy Symposium on August 22,Federal Reserve Chair Jerome Powell indicated a potential openness to a rate reduction in September,citing a softening labor market and increasing inflation concerns.
Following Powell’s statements, Keyrock analysts observed that prediction markets now assign approximately an 80% probability to a 25-basis-point rate cut in September. The likelihood of a larger 50-basis-point reduction remains low,at around 4%,suggesting that markets anticipate a gradual easing of monetary policy by the fed.
