Key Points
- Bitcoin’s price increased as the European Central Bank (ECB) maintained steady interest rates.
- Despite a downturn in global markets, Bitcoin’s upward trajectory continued.
Despite a general pullback in the global markets, the price of Bitcoin saw an increase. This rise came after the European Central Bank (ECB) decided to hold interest rates steady for the fifth consecutive meeting.
The largest cryptocurrency by market capitalization saw an increase of around 1.5% over the past 24 hours. This occurred even as global markets saw a slight downturn, with major equity indices falling.
ECB Holds Rates Steady
The ECB decided to keep the eurozone’s key interest rate at 4%, the main refinancing rate at 4.5%, and the marginal lending facility at 4.75%. This decision means that interest rates across the eurozone will remain at their highest level in over two decades.
The ECB stated that a reduction in the current level of monetary policy restriction would only be considered if there was more evidence of sustained inflation convergence to the target.
Potential for ECB Rate Cut in June
Konstantin Veit, a portfolio manager at PIMCO, suggested that if incoming data aligns with the scenario outlined in March, the ECB might implement rate cuts in June. Veit anticipates that the ECB will reduce rates cautiously, opting for conventional 25 basis point steps.
He noted that market expectations have adjusted to reflect a significant reduction in anticipated rate cuts. He highlighted that market risks now lean towards fewer cuts, mainly due to sticky services inflation, a resilient labor market, loose financial conditions, and ECB risk management considerations.
