ECB raises key interest rate: BTC unimpressed
The European Central Bank (ECB) raises the key interest rate to 0.5%. This is the first increase in 11 years. The Bitcoin price is initially unimpressed by this significant step.
First increase in the key interest rate in 11 years
On 21 July at 2:15 pm (CEST), the European Central Bank (ECB) announced a turnaround in its monetary policy. For the first time in 11 years, the ECB raises the key interest rate by 50 bps to 0.5%. Already in June, the president of the European Central Bank Christine Lagarde announced the turnaround, although since then there has been speculation about an increase of 25 bps. The fact that the ECB is increasing the interest rates more strongly is caused by the historically high inflation rate of 8.6% in the European Monetary Union.
Normalize monetary policy & ensure price stability
In an official statement, Christine Lagarde expressed her commitment to fighting rising inflation and ensuring price stability:
Raising interest rates was the latest step on our journey to normalise monetary policy, and it won’t be the last. There should be no doubt that we are committed to maintaining price stability. That is our job, and we will deliver.
Bitcoin price unimpressed afterwards
The Bitcoin price is initially unimpressed by this monetary policy decision. In the last 24 hours since the decision, the Bitcoin price has risen by about 4% ($23,589).
Whether this slight increase is really related to the ECB’s new monetary policy is difficult to assess. Perhaps the ECB decision comes, albeit late, just at a time when the crypto (and also the stock market) are rising again. The Bitcoin price, for example, has risen by almost 15% in the last seven days and is slowly making its way back to the $25k mark.
This article does not provide investment advice. Historical cryptocurrency data is not a guarantee of future market developments. The author may hold several of the cryptocurrencies mentioned in this article.
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