The interest rate downtrend cycle begins, with ETH as one of the biggest beneficiaries

The dovish signals released by Powell last night triggered a structural divergence in the crypto market—Ethereum's price temporarily surpassed Bitcoin, becoming the focus of capital chasing. The logic behind this is not complicated: when the market expects risk-free interest rates to decline soon, the approximately 3.5%-4% annualized yield offered by Ethereum staking becomes significantly more attractive.

For a long time, Ethereum staking rates have steadily risen to over 31%, but the pace of new staking has noticeably slowed in the first quarter of 2026, mainly due to the crowding-out effect of "risk-free returns" on risk assets in a high-interest-rate environment. Powell's recent remarks effectively loosened this constraint. After his speech, inflows into major staking protocols like Lido Finance and Rocket Pool saw a clear surge, with on-chain data showing institutional addresses accelerating their entry.

From a broader macro perspective, Ethereum, as the world's largest decentralized application ecosystem, is even more sensitive to interest rate environments than Bitcoin. On-chain financial activities such as DeFi lending and re-staking have opportunity costs directly linked to U.S. Treasury yields. Once the rate-cutting cycle truly begins, on-chain leverage ratios and total value locked (TVL) are expected to experience systemic recovery.

Meanwhile, Powell's dovish stance also aligns with the recent easing of tensions in the Middle East, further diminishing the safe-haven appeal of the dollar. Capital is flowing out of dollar assets and reallocating into high-beta assets like Ethereum. Although inflation data since February still needs validation, the market has already shown trust with real money—Ethereum quickly broke through the key technical level of $2,160 after Powell's speech, with the $2,200 mark now within reach.

For the Ethereum ecosystem, the macro environment easing may be more substantively meaningful than any technological upgrade.