Bitcoin, Ethereum Prices Soar Amid ECB Rate Hike And US GDP Report

On Thursday, the European Central Bank (ECB) raised interest rates by another 75 bps. The ECB expects to raise interest rates further to hit the medium-term inflation target of 2%. Volatility increased in the crypto market as the U.S. Dollar Index (DXY) jumped higher, but subdued later. The largest cryptocurrencies Bitcoin (BTC) and Ethereum (ETH) price soars almost 1% each after the ECB hiked interest rates.

Macro Improved Amid ECB Rate Hike and US GDP Report

The Governing Council of the ECB on October 27 raised the interest rate by another 75 bps. ECB believes the third continuous 75 bps rate hike will ensure a timely return of inflation to the medium-term inflation target of 2%. Moreover, the council adjusted the interest rates applicable to targeted longer-term refinancing operations (TLTRO III) from 23 November 2022. It will help offer voluntary early repayment dates for banks.

“The interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be increased to 2.00%, 2.25% and 1.50% respectively, with effect from 2 November 2022.”

The U.S. Dollar Index (DXY) subdued after the ECB raised interest rates despite recession fears. Meanwhile, the U.S. Q3 GDP comes in higher at 2.6% against the expected 2.4%. It is the highest GDP growth since Q4 2021 and after recording negative GDP growth in the last two quarters. Thus, containing the U.S. from officially falling into recession. Elon Musk earlier said the U.S. economy is actually growing strongly, but Europe and China risk falling into recession.

Bitcoin and Ethereum Prices Soars Higher

The broader crypto market witnessed a further increase in prices as the macro improved. Bitcoin (BTC) price soared over 1% in an hour, with the current price trading at $20,708. Meanwhile, Ethereum (ETH) price jumped almost 2% in an hour and 4% in the last 24 hours. The ETH price is trading at $1,573.

Altcoins including XRP, Cardano, Solana, and Polygon also witnessed a nearly 1% increase. Whereas, Dogecoin and Shiba Inu price rises further with a 4% and 2% increase in an hour, respectively.

The Federal Reserve to announce its rate hike at the FOMC meeting on November 2. According to the CME FedWatch Tool, the probability of a 75 bps rate hike is 91.6%.

Varinder is a Technical Writer and Editor, Technology Enthusiast, and Analytical Thinker. Fascinated by Disruptive Technologies, he has shared his knowledge about Blockchain, Cryptocurrencies, Artificial Intelligence, and the Internet of Things. He has been associated with the blockchain and cryptocurrency industry for a substantial period and is currently covering all the latest updates and developments in the crypto industry.

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