The European Central Bank (ECB) continuing to cut interest rates for the 9th consecutive time is creating a notable macroeconomic context that indirectly affects the cryptocurrency market. The ECB just announced a further 25 basis point cut, bringing the deposit rate down to 2% from 2.25% in April. This is a consistent move since September 2023, with the refinancing rate also reduced from 2.4% to 2.15%.
#ECB affirms that it will continue to adjust policy based on inflation data and the transmission of monetary policy, showing flexibility in economic management. This move is expected to stimulate economic growth in the European region, potentially creating a more favorable environment for risk assets such as cryptocurrencies in the long term.
In the context of falling interest rates in Europe, the EURUSD exchange rate is currently at 1.144, up 14% from the bottom of 1.018 set on January 13, 2025, according to data from #FXCE . This reflects the forex market's response to the ECB's monetary policy and indicates confidence in the economic recovery outlook for the region.
Meanwhile, the Federal Reserve of the United States (Fed) has not taken similar action, which has caused former President Donald Trump to express his dissatisfaction on #TruthSocial . He criticized Chairman Jerome Powell for the "delay" in lowering interest rates, emphasizing that Europe has cut rates nine times. The Fed's next interest rate meeting is scheduled for June 18-19.
The difference in monetary policy among major global central banks can create volatility and opportunities in financial markets, including the cryptocurrency market. Central banks' easing of monetary policy is often seen as a supportive factor for digital assets, as it can drive capital flows seeking higher returns. Therefore, these developments bring a positive outlook for the long-term growth of the crypto market.
The information in this article is for reference only and is not investment advice.