Bitcoin retreats ahead of Powell’s Jackson Hole speech after record highs

Cryptocurrency markets slipped in Tuesday’s trading as investors turned their attention to the upcoming speech by Federal Reserve Chairman Jerome Powell at the Jackson Hole Forum, which opens tomorrow and runs until August 23.

According to Coinbase data, Bitcoin fell 0.8 percent to $115,429, after reaching a record high of $124,457 last week. Ethereum declined 2 percent to $4,276.2, while Ripple dropped 1.9 percent to $3.0199, and Dogecoin retreated 2.3 percent to $21.88.

Despite the declines, activity across the sector remained strong. Trading volume rose by 2 percent in the past 24 hours to $171.45 billion, while the total market capitalization of all cryptocurrencies edged up 0.65 percent to $3.89 trillion, according to CoinMarketCap.

The focus now shifts to the Jackson Hole symposium, where policymakers are expected to outline their views on the US economy, the labor market, and the path of interest rates. Analysts suggest these signals could have a direct effect on digital assets, which are highly sensitive to liquidity and monetary policy shifts.

Cryptocurrencies have experienced an extraordinary summer rally, with Bitcoin breaking above $124,000 for the first time. The surge has lifted shares of crypto-related companies, fueled Wall Street’s growing embrace of digital assets, and attracted unprecedented institutional interest.

Much of the momentum has been driven by policy changes in Washington. President Donald Trump’s executive order allowing digital assets in 401(k) retirement plans has encouraged investors, while the GENIUS Act, passed by Congress in July, created a regulatory framework for stablecoins, enabling major banks like JPMorgan to enter the market.

The sector’s strength is reflected in equity performance: Robinhood’s stock has surged 200 percent since January, Bitmain Emergen Technologies jumped 625 percent, and BlackRock’s Bitcoin ETF has risen 137 percent since its launch in early 2024, far outpacing the S&P 500’s 37 percent gain in the same period. Even big tech has entered the fray, with Google signing a multi-billion-dollar partnership with a Bitcoin mining company.

Experts see this wave as the start of a new cycle of institutional adoption rather than a temporary spike. However, concerns remain. Consumer protection advocates warn that new legislation could fuel speculation while leaving investors vulnerable. Still, the Trump administration insists on making the US the “world’s Bitcoin superpower,” as Treasury Secretary Scott Bessent put it.

Commenting on recent market movements, cryptocurrency and digital asset expert Rashed Al-Khazai told Al Arabiya Business that the pullback in Bitcoin and Ether-linked ETFs was largely due to profit-taking after record highs. “When Bitcoin hit $124,000, we expected rapid sell-offs, particularly through ETFs, which remain the primary gateway for American institutional investors,” he said.

Al-Khazai noted that the Jackson Hole meeting will be pivotal, given expectations around interest rate cuts. Markets had initially priced in three cuts for 2025, but current forecasts suggest only two, with the first possibly delayed until after September. “US interest rate decisions have a direct and significant impact on Bitcoin, as an asset closely tied to liquidity flows,” he explained.

He added that Bitcoin is currently trading in a sideways pattern, describing it as a “compressed spring” due to reduced miner transfers to exchanges, declining liquidity on trading platforms, and ongoing inflows from retail investors seizing buying opportunities.

Al-Khazai also highlighted MicroStrategy’s plan to purchase 430 bitcoins worth $58 million at an average price of $119,600 each, describing it as part of the company’s Dollar Cost Averaging strategy, which ensures steady and stable market inflows regardless of short-term price fluctuations.

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