Bitcoin price gains despite a pullback in global markets as ECB holds rates steady

Bitcoin BTC +1.91% 's price gained on Thursday after the European Central Bank (ECB) voted to keep interest rates on hold for the fifth consecutive meeting. 

The largest digital asset by market capitalization increased by around 1.5% in the past 24 hours and was changing hands for $69,607 at 11:16 a.m. ET, according to The Block's Price Page .

Although bitcoin typically closely tracks risk-on assets like major equity indices, the cryptocurrency's upward trajectory came as global markets inched down. The Dow Jones Industrial Average fell for a fourth day in a row, the SP 500 declined 1% and the Nasdaq Composite dropped 0.1%. In Europe, the regional Stoxx 600 index fell 0.7%, and London's FTSE fell 0.67%.

Bitcoin moved higher on Thursday despite a pullback in global markets. Image: The Block.

ECB keeps rates steady

The eurozone’s key interest rate remained unchanged at 4%, the main refinancing rate at 4.5% and the marginal lending facility at 4.75%.

Today's decision means that interest rates across the eurozone will stay at their highest level in over two decades.

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The ECB said it would only be appropriate to reduce the current level of monetary policy restriction if the central bank receives further evidence that inflation is converging to the target in a sustained manner.

Possibility of ECB rate cut in June

PIMCO Portfolio Manager Konstantin Veit suggested that if incoming data, particularly concerning wages and profits, aligns with the scenario outlined in the March projections, the ECB will likely implement rate cuts in June.

In an email sent to The Block, Veit anticipated that once the ECB begins reducing rates, it will do so cautiously, opting for conventional 25 basis point steps.

The analyst observed that market expectations have adjusted to reflect a significant reduction in anticipated rate cuts and highlighted that market risks now lean towards fewer cuts. "Risks are probably towards less cuts, mainly on the back of sticky services inflation, a resilient labour market, loose financial conditions and ECB risk management considerations," Veit said.