• The European Central Bank (ECB) raised the deposit facility rate from 2.5% to 3%.
• Markets were expecting a 50bps rate hike but saw a 35% probability of this before the decision was made.
• Bitcoin remains just below $25,000 despite the ECB’s decision.
ECB Raises Deposit Facility Rate
The European Central Bank has increased the deposit facility rate by 50 bps, bringing it up to 3%. Before the collapse of SVB and Credit Suisse, markets were expecting a 50bps rate hike, but moments before the decision was made, there was only a 35% probability of this happening.
Currency Market Reactions
Currency markets reacted positively to this news with EUR/USD increasing 0.7%, GBP/USD rising 0.8%, and USD/JPY decreasing 0.9%. The currency markets generally saw positive sentiment due to the ECB’s decision as they are seen as more stable than other currencies such as Bitcoin which fluctuates in value daily.
Bitcoin Stands Firm Below $25K
Despite all of this movement in currency markets, Bitcoin remains relatively unaffected and is currently trading just below $25,000 USD per coin. This could be attributed to its decentralized nature which makes it largely immune from major policy decisions from central banks like those from the ECB or Federal Reserve in America.
James Van Straten’s Opinion on Bitcoin
James Van Straten, research analyst at CryptoSlate commented that he sees Bitcoin as “the greatest invention of the 21st century” because of its ability to circumvent intermediaries via peer-to-peer network and its decentralized nature which gives it immunity against major policy decisions by central banks around the world.
Disclaimer
CryptoSlate does not give any investment advice and readers should do their own due diligence before taking action related to content within this article as buying and trading cryptocurrencies is seen as high-risk activity.
