Institutional Interest in Ethereum and Federal Reserve Policy Shift Ignite Prospects for a Crypto Supercycle

Mike Novogratz, the CEO of

, believes that upcoming changes in Federal Reserve policy and new leadership could spark a crypto “supercycle.” His outlook is based on the combined effects of looser macroeconomic conditions, greater institutional involvement, and Ethereum’s (ETH) increasing edge over (BTC) during the current bull run. Galaxy’s September 2025 report noted that August 2025 brought a resurgence of institutional interest in digital assets, fueled by Ethereum’s strong performance and developments such as corporate blockchain projects and sovereign digital asset investments September 2025 Crypto & Macro Commentary [ 1 ].

August was shaped by macroeconomic swings and shifting expectations for the Fed, as conflicting inflation data and weak employment numbers led markets to anticipate more dovish policies. The Jackson Hole meeting reinforced this, with Chair Jerome Powell highlighting a “shifting balance of risks” due to rising joblessness. Stocks responded with gains, while traditional safe-haven assets like gold and Bitcoin saw renewed buying. At the same time,

climbed to a four-year peak of $4,953, outperforming and signaling a major change in investor outlook September 2025 Crypto & Macro Commentary [ 1 ].

Ethereum’s rally was further driven by strong inflows into spot ETFs and increased accumulation by digital asset treasury companies (DATCOs). U.S.

ETFs saw $4 billion in inflows in August, the second-largest monthly figure after July, while BTC ETFs experienced net withdrawals. DATCOs, especially those focused on ETH, made substantial investments, with a $1 billion allocation to ETH having a significant impact due to its smaller market size compared to BTC. Novogratz credited Ethereum’s surge to institutional strategies, pointing out that firms like Bitmine boosted their ETH holdings from 625,000 to over 2 million by the end of the month September 2025 Crypto & Macro Commentary [ 1 ].

The growing adoption of blockchain by corporations further highlighted the sector’s move toward institutionalization. Companies including Circle, Stripe, and Google introduced Ethereum Virtual Machine (EVM)-compatible layer-1 (L1) networks, aiming to capture value through their own infrastructure. While some criticized these efforts for prioritizing control over decentralization, they reflect a broader shift toward integrating blockchain into mainstream finance. Meanwhile, U.S. Secretary of Commerce Howard Lutnick revealed plans to release GDP figures on public blockchains using oracle networks, indicating increasing government acceptance of decentralized technology September 2025 Crypto & Macro Commentary [ 1 ].

The relationship between easier macroeconomic policy and institutional capital flows remains crucial. As expectations for Fed rate cuts increased, Bitcoin’s connection with gold grew stronger, reinforcing its reputation as a hedge. In contrast, Ethereum and other altcoins remained more responsive to changes in risk sentiment, as shown by the Bloomberg Galaxy Crypto Index (BGCI), which tracked widespread rallies among alternative coins. Galaxy noted that ongoing demand from DATCOs and corporate treasuries, alongside clearer regulations, could help sustain the crypto market’s momentum into autumn September 2025 Crypto & Macro Commentary [ 1 ].

Major developments in September 2025, such as the Fed’s FOMC meeting and new inflation data, will challenge the strength of the current uptrend. Should the Fed proceed with significant rate cuts, Novogratz suggests the crypto sector could enter a supercycle similar to the 2020–2021 boom. Nevertheless, persistent inflation and fiscal challenges could limit gains over the long term. For now, attention is focused on the upcoming Fed Chair, whose decisions are likely to shape the future of digital assets in the years ahead September 2025 Crypto & Macro Commentary [ 1 ].