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Bitcoin hovers near $64,000 as ECB bond and credit tightening weighs

The ECB kept key rates unchanged but its APP and PEPP bond portfolios shrank further in June and again through mid-July, while euro-area banks tightened lending standards for business and housing.

Reported · Written up by our desk · Market Structure

Bitcoin traded around $64,000 on July 25, after changing hands near $65,000 around the ECB’s July 23 decision, as investors weighed the impact of restrictive central-bank bond and credit channels, according to CryptoSlate.

The ECB held its three key interest rates steady at the deposit facility rate of 2.25%, the main refinancing rate of 2.40%, and the marginal lending facility rate of 2.65%, while continuing balance-sheet runoff that kept policy conditions restrictive.

Official ECB data cited by CryptoSlate showed that the asset purchase program and pandemic emergency purchase program portfolios declined by a combined €39.447 billion in June. Weekly figures then indicated an additional drop of about €31.1 billion by July 17, with expected APP redemptions of €27.039 billion and expected PEPP redemptions of €24.714 billion during the month.

CryptoSlate added that banks in the euro area tightened access to business and housing credit, and that the ongoing ECB bond roll-off reduced central-bank demand for safer, interest-bearing assets at the same time borrowers continued to face rates that remain elevated. The July decision also preserved the prior 25-basis-point increase from June, keeping policymakers room for another increase if the energy shock spreads further into wages and consumer prices.

Latest closeBitcoin $81,906.63 ▼1.4%

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