Bitcoin prices surged on Thursday after the European Central Bank (ECB) decided to keep interest rates unchanged, ending its fifth straight meeting with no change in interest rates.
The largest cryptocurrency by market capitalization rose 1.5% over the past 24 hours, reaching $69,607 at 11:16 a.m. ET, according to data from The Block’s pricing page. This rise in Bitcoin’s value comes amid a broader decline in global markets, with major stock indices falling.
Despite the Dow Jones Industrial Average falling for a fourth straight day and the S&P 500 and Nasdaq Composite also falling, Bitcoin defied the downward trend. In Europe, the regional Stoxx 600 index and London’s FTSE also posted losses.
The ECB’s decision to keep interest rates at historic highs unchanged, including keeping the benchmark interest rate at 4%, the main refinancing rate at 4.5% and the marginal lending facility at 4.75%, has contributed to Bitcoin’s positive momentum. The central bank emphasized that it needed further evidence of sustained inflation convergence before considering easing monetary policy restrictions.
Konstantin Veit, portfolio manager at PIMCO, suggested a possible ECB rate cut in June if incoming data is consistent with the outlook outlined in March. Veit expects a cautious rate cut of 25 basis points once it begins, with market expectations adjusted to reflect the potential cut. However, Veit highlighted the existence of risks tilting towards a smaller rate cut, citing factors such as persistent services inflation, resilient labor markets, loose financial conditions and ECB risk management considerations.
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