The Eurozone will curb inflation with a new interest rate hike while Bitcoin reacted to the news and dropped below $23K as we can see more today in our latest Bitcoin news.
After reclaiming the $24,000 mark a few days ago, BTC is back in the red as the price of the cryptocurrency dropped below $23,000. the latest price action came after Tesla announced that it sold 75% of its BTC stash which was worth up to $936 million and the ECB announced that they will increase interest rates up to 0.5%. The price of BTC reacted well and slipped below the $23,000 level and dropped to a new low of $22,457. BTC was trading at $22,600 down by 6.4% on the day and the broader market also tumbled.
Ethereum dropped by 6% in the past 24 hours to a price of $1500 with other major oceans dropping between 6% and 9%. however, it’s not all that bad for cryptocurrency. The Tesla CEO noted that the company’s holdings of BTC should not be taken as some verdict on bitcoin and that the company will seek to increase the holdings in the near future. The investment bank JPMorgan seems to be bullish on crypto and opined that retail investors are showing a growing demand for the digital assets:
“The extreme phase of backwardation seen in May and June, the most extreme since 2018, appears to be behind us.”
It remains to be seen how BTC and other cryptocurrencies will perform in the long term and this came after the Eurozone will curb inflation with a new interest rate hike. The decision was brought while trying to control the galloping inflation in the Eurozone which reached 8.6% in June and spells the end of the -0.5% negative interest rate offered by the ECB since 2014. with the latest increase, borrowing will be less attractive and could help cur some of the Eurozone inflationary pressure and the market volatility. A spokesperson from Bitstamp said:
“Despite market volatility and the changing economic context, we believe cryptocurrencies will play a huge role in the next decade—for everyday investors and for financial services institutions.”
The exchange noted that the fluctuations in the market occurred before as well but the right way to move forward is to have a proper regulatory framework:
“What we would say is that moments like this do show why it is crucial that robust regulations are developed to deliver increased stability to the sector, so as to support the underlying case for crypto as an alternative system in times of rising rates.”
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