Bitcoin Rises as ECB Reduces Interest Rates

Bitcoin has experienced a minor increase, climbing from below $71,000 to above $71,300, following the European Central Bank's (ECB) decision to cut interest rates for the first time in five years.

ECB Reduces Key Rates

The ECB has decreased its key interest rates by 0.25 percentage points. The Central Bank commented, "Keeping interest rates high for nine months has helped push down inflation. It is now appropriate to moderate the degree of monetary policy restriction."

Inflation in the euro area fell to 2.6% in May, approaching the target of 2%. However, growth remains stagnant at 0.4% for Q1.

ECB's Stance

The ECB did not address the lackluster growth in its statement and did not commit to further cuts, stating they will be data-dependent. The bank's statement noted, "Based on an updated assessment of the inflation outlook, the dynamics of underlying inflation, and the strength of monetary policy transmission, it is now appropriate to moderate the degree of monetary policy restriction after nine months of holding rates steady."

The main rate is now at 3.75%, down from 4%, which will lower borrowing costs for households and businesses.