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Bitcoin Up 2% as European Central Bank Signals End to Rate Hikes
Bitcoin (BTC) Exchange Rate Has Risen
Bitcoin (BTC) gained 2% on Thursday after the European Central Bank (ECB) indicated that its most recent interest rate hike may be the final. The ECB indicated in an announcement that its main interest rates had reached levels that would considerably contribute to the timely return of inflation to the objective. The bank increased three important interest rates by 0.25%, bringing the primary deposit facility rate to 4% from -0.5% in June 2022.
Analysts were already skeptical of another rate hike at the September meeting, with markets pricing in a 63% chance of one. However, the current rate is still below inflation predictions. The ECB now expects inflation to average 5.6% in 2023 and 3.2% in 2024, up from its earlier projections due to an increase in energy price projections.
The ECB underlined that underlying pricing pressures remain considerable, despite the fact that some signs have begun to moderate. Tightening financial conditions are also reducing demand, which is critical for returning inflation to target. The bank predicts that the eurozone's economic development would slow significantly, with growth rates of 0.7% in 2023 and 1.0% in 2024.
The increase in interest rates by central banks such as the ECB and the Federal Reserve has had an influence on investments in risk assets such as equities and cryptocurrencies. Bitcoin temporarily surpassed $30,000 in March 2023, following the start of the Federal Reserve's Bank Term Funding Programe.
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