Ethereum is outperforming the S&P 500, but Fed meeting will either puncture or fuel the price rally, analyst says

Ethereum is surging, but the Federal Reserve risks puncturing the rally and altcoins will be worse off than Bitcoin if that happens, an analyst warns.

At the same time, the second biggest cryptocurrency’s outperformance of the S&P 500 hasn’t just seen Ethereum’s price rally some 25% in March, but may also signal that momentum is building for digital assets, argues Adam Saville Brown, head of commercial at crypto asset manager Tesseract Group.

“That kind of rotation into the second-largest asset suggests risk appetite is broadening, which tends to be a healthy sign,” he told DL News.

Ethereum’s surge coincides with Wall Street deepening its bets on the blockchain technology, despite the price still down over 50% from its August peak of $4,950.

To be sure, Brown cautions that the rally may be dented if the Federal Reserve Chair Jerome Powell signals any upcoming surprises to the central bank’s 2026 rate cutting plans. The US-Israeli conflict has already reduced the chances of a rate cut this week to less than 1%, down from 58% in December, according to the CMEFedWatch tool.

“If Powell strikes a cautious tone on inflation, altcoin gains will reverse faster than Bitcoin’s,” Brown said.“The honest assessment is that the [price]floor looks solid. The ceiling requires more than a rate hold to break through.”

Institutional buying

Even so, institutions are piling into Ethereum.

Bitmine has doubled down on the $280 billion cryptocurrency even as the industry has suffered a $2 trillion drawdown since October.

On Monday, the firm announced another $128 million purchase, bringing its total stash to over $10 billion.

“Since the start of the Iran war, crypto prices have outperformed and Ethereum has outperformed the S&P 500 by 24.5%,” chair Tom Lee said. “This is a meaningful outperformance in a mere two weeks.”

“In our view, higher oil is triggering concerns of slowing growth for the global economy. And when investors worry about growth, they buy ‘growth stocks’ including MAG7, software and crypto. As the chart below shows, crypto moves in tandem with software stocks,” he said.

The firm also disclosed that it acquired 5,000 Ether directly from the Ethereum Foundation through an over-the-counter transaction enabling the EF to fund its core operations.

“Bitmine acquired the Ether to demonstrate our support for the goals and operations of EF and enabled EF to raise capital without having to sell its ETH in the open market,” it said.

Bitmine is joined by the likes of BlackRock in its support for the 10-year-old blockchain network.

BlackRock’s new iShares Staked Ethereum Trust ETF debuted strongly on Thursday, immediately generating nearly $16m in trading volume after launching with $100m in assets. The launch highlights the asset manager’s growing bet that Ethereum will underpin the next wave of tokenised finance and institutional blockchain infrastructure.

“The institutional conviction story is intact,” said Jasper De Maere, an OTC trader at crypto market maker Wintermute. “What’s still unproven is whether this is structural accumulation or tactical buying at perceived support.”

Bitmine x OpenAI

Bitmine also announced it indirectly acquired equity in OpenAI.

The firm increased its investment in Eightco Holdings, known by the ticker ORBS, by another $80 million.

Eightco has used that capital to buy a $50 million equity stake in OpenAI and a $25 million stake in Beast Industries, the company behind YouTube creator MrBeast.

The deal makes ORBS the only publicly listed stock offering investors direct exposure to OpenAI ahead of its widely expected initial public offering in 2026.

Bitmine also said the investment could create links between Worldcoin’s proof-of-human system, OpenAI’s artificial intelligence platform and MrBeast’s global media reach.

Meanwhile, Eightco is bringing Cathie Wood’s ARK Invest on as a strategic adviser, a move aimed at boosting investor interest in ORBS.

Lance Datskoluo is DL News’ Europe-based markets correspondent. Got a tip? Email at [email protected].