Sean Dawson Indicates That The FED's Interest Rate Cuts Could Push Ethereum Prices Up To $8,000 By The End Of The Year

In an exclusive conversation with Coinpedia, Sean Dawson, Head of Research at Derive, shared his views on the macroeconomic factors and blockchain shaping the crypto market, particularly the trajectory of Ethereum. From the policy changes of the Federal Reserve to the growing role of ETH fund management companies, Sean outlined the factors that could be the biggest drivers for cryptocurrency in 2025. The Fed May Cut Interest Rates in September Sean shared with Coinpedia that he expects the Federal Reserve to cut interest rates by 25 basis points in September, with "the odds being 95% on Fedwatch and about 80% on Polymarket." He believes that this possibility is due to tension in the labor market — the rising unemployment rate and weaker revised employment reports have created pressure to change monetary policy. The Scalability of Layer 2 Compared to Macroeconomic Forces for Ethereum When asked how upgrades like Dencun can be compared to broader macro impacts, Sean responded clearly: "The main driver pushing ETH prices in this cycle comes from fund management companies like Bitmine and Ethermachine. Currently, they hold 3.6 million ETH (, about 3% of the total ETH supply ), up from almost nothing in April this year." He explained that the demand for these treasury instruments is largely driven by macro factors — expectations of declining interest rates and increased government spending in the United States through the "Gorgeous Big Bill" have pushed investors towards high beta activities such as ETH treasury. However, Sean acknowledged that Layer 2 solutions are crucial, providing a vision of an internet financial system that is scalable, even if macroeconomic drivers are larger catalysts in the short term. Ethereum is Making Strong Progress Compared to Bitcoin Ethereum has recently shown relatively strong performance compared to Bitcoin, and Sean sees this trend continuing: "The sudden increase in ETH fund management companies will be a significant boost for the widespread adoption of ETH. I can see the ETH/BTC ratio rising from the current level of 0.033 to the 2017 level — around 0.1 to 0.15 — by the end of this year." Price Outlook for 2025 Looking further, Sean sees that both Bitcoin and Ethereum have great potential for price increase: Bitcoin (BTC): The ability to exceed the $150,000 mark by the end of the year is 50/50, with the potential to increase exponentially to $200,000 being about 12% based on the options market price. Ethereum (ETH): More volatile than BTC, with a 50/50 probability of reaching $6,000 and a 25% chance of hitting $8,000, especially if the demand for treasury bonds and macro trends align. Ethereum ETF Compared to Bitcoin ETF in the Next Cycle Regarding whether the Ethereum ETF can surpass the Bitcoin ETF in terms of capital inflow, Sean said: "It is entirely possible, but difficult to happen. BTC is the standard cryptocurrency. The utility of ETH will help the cash flow become more balanced over time, but BTC may still be the preferred choice of institutions." L2 Notification Code in the Organization's Investment Portfolio Sean does not expect Layer-2 tokens to rival ETH in the holdings of institutions in the near future: "ETH took many years to reach its current level of popularity compared to BTC. The L2s are fragmented and have value based on ETH, so currently, risk-averse institutions will continue to use ETH." Layer 1 Ecosystem is Underestimated Although most of his outlook focuses on the adoption of BTC and ETH, Sean notes that Solana could see growth by the end of the cycle, especially if meme coin trading activity recovers. If Solana adopts the treasury management strategy, this could reflect the growth trajectory of ETH.