Bitcoin saw a rise in its price on Thursday following the European Central Bank’s decision to maintain interest rates for the fifth consecutive meeting.
The leading digital asset, Bitcoin, experienced an increase of approximately 1.5% over the past 24 hours, trading at $69,607 as of 11:16 a.m. ET, according to data from The Block’s Price Page.
Despite the typical correlation between Bitcoin and risk-on assets such as major equity indices, the cryptocurrency’s upward movement occurred amidst a slight downturn in global markets. The Dow Jones Industrial Average recorded its fourth consecutive day of decline, with the S&P 500 dropping by 1% and the Nasdaq Composite dipping by 0.1%. Similarly, in Europe, the regional Stoxx 600 index decreased by 0.7%, while London’s FTSE fell by 0.67%.
The European Central Bank decided to maintain 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 signifies that interest rates across the eurozone will remain at their highest level in over two decades.
The ECB indicated that it would consider reducing the current level of monetary policy restrictions only if there is further evidence that inflation is consistently converging towards the target.
There is speculation among analysts, including PIMCO Portfolio Manager Konstantin Veit, that if incoming data aligns with the scenario outlined in the March projections, the ECB may implement rate cuts in June. Veit anticipates that any rate reductions would likely be cautious, with the ECB opting for conventional 25 basis point steps.
Market expectations have adjusted to reflect a significant reduction in anticipated rate cuts, with risks leaning towards fewer cuts due to factors such as sticky services inflation, a resilient labor market, loose financial conditions, and ECB risk management considerations, as noted by Veit.
