Central Bank interest rates affect the interest that customers pay on mortgages, personal loans, credit card debt, and any other type of central bank loan. These rates are determined by the central bank authority for each jurisdiction and change regularly to reflect current market conditions.
In the past, decisions to dramatically change interest rates have had a knock-on effect on the crypto market. In this article, we will take a look at how the recent European Central Bank (ECB) interest rate decisions have affected the crypto space.
About The European Interest Rate Decision
The European Central Bank announced its most recent interest rate decisions on March 16th. The decision affected the interest rates in 19 different European countries including Austria, Belgium, Croatia, France, Germany, Greece, Italy, and others. As a result, the decisions that were made on the 16th of March were highly anticipated.
The interest decision was made by the governing council of the ECB. The final decision was based on a number of factors including current levels of inflation, supply and demand of loans, and economic stability.
The ECB decided to raise 3 key interest rates by 50 basis points in an attempt to eventually return inflation to a 2% level. This came as no surprise to market watchers who predicted that the rates would be hiked. The governing council of the ECB is currently monitoring inflation and is reportedly prepared to take further action if needed. It is hoped that inflation will reach 2.1% by 2025.
How Did The ECB Interest Rate Decision Affect The Crypto Market?
The crypto market has been experiencing a bull run in the past few weeks with Bitcoin hitting a yearly high of $28k. The ECB interest rate decision did not appear to impact this trend and any effects that may have been felt by the decision were most likely muted by the collapse of Silicon Valley Bank.
The crypto market is currently very volatile which makes it difficult to determine the exact cause of price fluctuations and movements. Nevertheless, the announcement of the decision did not seem to derail crypto’s current run. According to the economic calendar, there are a number of events coming up that cryptocurrency investors should be aware of. These include further interest rate decisions that are set to be made by the SEC in April as well as crypto regulatory decisions that are currently being discussed by countries including China and the UK. Investors should keep an eye on potential progression and be prepared to change their portfolios accordingly.
The Future Looks Volatile for Crypto
The crypto market is currently very volatile and factors, such as global news, have the power to cause big fluctuations. On one hand, the lack of trust in the current banking system helped Bitcoin to maintain its bull run. On the other hand, volatile markets are incredibly risky and the news cannot be used to determine future prices.
Overall, interest rate decisions have had a history of impacting the crypto market. However, the recent ECB decision rate was overpowered by the fall of Silicon Valley Bank, which sent Bitcoin on a bull run. Investors should still be careful to watch economic events so that they are prepared for events that could impact the crypto market.
