How does ECB increasing interest rate affect BTC?

NFP doesn’t affect the value of btc so whether the ECB increases the interest rate or not, btc shouldn’t be influenced, also it’s not part of the “fiat” eco system. But I have heard some ppl talk about ECB increasing interest rates might affect BTC. If yes, then how?

In what way should BTC be affected if ECB raises the interest rates? Could you please be specific? It should help. I am kinda new to all this so it would be better if you could explain it better. Thank you so much! Please respond, it should be really helpful for me.

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6 thoughts on “How does ECB increasing interest rate affect BTC?”

  1. When interest rates are raised, it’s more expensive to borrow money and this almost always results in less buying of equity assets, especially risky ones like BTC.

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  2. Higher interest rates mean that some investors sell their (risky) crypto investment to buy (saver) traditional investments.

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  3. >But I have heard some ppl talk about ECB increasing interest rates might affect BTC. If yes, then how?

    Low interest rates mean “fresh” money is easy to get and people have to invest this money somewhere. A lot. Now they’re raising interest rates which means less money can go into risky stuff like crypto. Less money means prices won’t climb as much or dump harder.

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  4. Central banks basicly try to take money out of the system , wich makes demands of products less and prices go down.

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  5. Other than the borrowing costs mentioned, there’s the opportunity to once again invest in profitable debt instruments. There’s a belief that the entire equity market (not just crypto) was being massively overvalued because interest rates were terrible. People that would normally invest in a mix of stocks and bonds were forced to invest more in stocks because the bond returns were too low to meet their goals. Now that rates are rising, bonds are going to become more attractive, taking capital away from equity and crypto investments.

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