- European Central Bank cuts interest rates by 0.25%, third time this year.
- Rates now at 3.25%, further cuts expected in December.
- Crypto market responds timidly despite the rate changes.
Europe’s inflation rates appear to be under control. On Thursday, European Central Bank President Christine Lagarde announced a new 0.25% interest rate cut for the region, marking the third rate cut this year and the first consecutive cut of the decade.
During the press conference, Lagarde mentioned that – despite a small inflationary increase last month – Europe’s inflation rates are behaving as expected, and that the decision to lower interest rates came after analyzing data from the previous 5 weeks.
Currently, European interest rates are at 3.25%. Many expect the ECB to double down on its efforts to lower rates and announce yet another 0.25% cut in December of this year.
This development could mark a significant shift in the World’s economy. As Europe’s inflation gets settled, its focus is likely to shift to investing in local economic growth. As for the market, this is likely to be seen as confirmation that post-pandemic recession fears are almost ending – and riskier assets like crypto and stock are likely to see renewed interest and investment as confidence in economic stability grows.
Crypto Market Responds Timidly
The digital assets market has not issued an immediate positive response to the news of Europe’s interest rate cuts.
According to CoinMarketCap, Bitcoin lost around 0.5% over the past 24 hours. Meanwhile, Ethereum lost about 0.3% during the same timeframe. All the top-10 cryptocurrencies in the market showed a similar negative performance, with emphasis on BNB and Solana with the biggest losses of the day.
The recent report regarding Tesla moving its complete Bitcoin funds to new wallets has likely shaken the market over the day. However, the 1-hour chart is already revealing a shift against the bearish day, with Bitcoin and most other assets already gaining up to 0.4% over the past 60 minutes.
In contrast, the weekly chart reveals a completely different perspective on crypto performance. Over the past 7-days, Bitcoin gained 12.28% in value, even touching above the $68,000 zone on October 16th.
