[Bitcoin Now] Weakness Amid ECB Rate Hike News on 'Inflation Fear'

[Image source=Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] Due to inflation concerns, the European Central Bank (ECB) announced an interest rate hike for the first time in 11 years, causing the leading cryptocurrency Bitcoin to weaken.

According to the global cryptocurrency market tracking site CoinMarketCap, as of 11:09 AM on the 10th, the price of Bitcoin was $29,951, down 1.18% from the previous day (approximately 37.87 million KRW).

Bitcoin prices declined after the ECB held a monetary policy meeting on the 9th (local time) and announced that it would raise the benchmark interest rate, currently at 0%, by 0.25 percentage points starting in July and raise it again in September. Marcus Sotiriou, a researcher at the digital asset brokerage firm GlobalBlock, said, "The globalization of markets can affect all economies, so the stock market and cryptocurrencies may suffer short-term impacts."

Additionally, there is analysis that investors are taking a wait-and-see approach ahead of the U.S. May Consumer Price Index (CPI) announcement. Edward Moya, senior market analyst at global investment firm OANDA, said, "Cryptocurrency investors are waiting for the major inflation report that could unsettle expectations about what actions the U.S. Federal Reserve (Fed) will take in September, causing Bitcoin prices to hover around the $30,000 level."

The U.S. stock market, which shows a synchronized trend with Bitcoin prices, also closed lower. The Nasdaq index, focused on technology stocks, fell 332.04 points (2.75%) to close at 11,754.23 the previous day. The Dow Jones Industrial Average dropped 638.11 points (1.94%) to 32,272.79, and the large-cap S&P 500 index ended trading down 97.95 points (2.38%) at 4,017.82. This is explained by heightened global tightening concerns following the ECB's interest rate hike announcement.

Meanwhile, Dunamu, which operates the domestic cryptocurrency exchange Upbit, reported its digital asset Fear & Greed Index at 38.29 on the day, indicating a 'Fear' stage. Dunamu's digital asset Fear & Greed Index is divided into 'Extreme Fear (0?20)', 'Fear (20?40)', 'Neutral (40?60)', 'Greed (60?80)', and 'Extreme Greed (80?100)'. The greed direction indicates increased interest in buying by market participants, whereas moving toward fear indicates a fear of asset decline, leading to market exits and a chain reaction of price drops.

This content was produced with the assistance of AI translation services.