The European Central Bank (ECB) lowered interest rates by 25 basis points today, but the cryptocurrency market showed almost no reaction. This demonstrates that the European market's influence in the cryptocurrency sector is diminishing compared to the United States.
Meanwhile, the cryptocurrency community is hoping for a U.S. interest rate cut, and a false tariff rumor caused a massive surge. These policies remain important, but Europe is losing its macroeconomic influence.
ECB Interest Rate Cut...Crypto Indifferent
Global recession concerns are spreading across the cryptocurrency market, with regulation playing a crucial role. U.S. investors are eagerly hoping for an interest rate cut, hoping it will provide a positive narrative.
It has not been realized yet. However, the ECB lowered interest rates for the sixth consecutive time today, but the cryptocurrency market showed almost no reaction.
"Growth prospects have deteriorated due to increased trade tensions. The increase in uncertainty may reduce household and business confidence, and the negative and volatile market response to trade tensions may have a tightening impact on financial conditions," the ECB stated in a public statement.
According to price data, the total cryptocurrency market capitalization decreased by 0.2% after the ECB announced the rate cut. All assets among the top 10 assets rose today, except for one.
Does this mean that macroeconomic factors are losing their influence on the cryptocurrency market? This concept is clearly not true. In less than two weeks, cryptocurrencies saw a significant rebound after a false rumor that Trump would suspend tariffs.
This rise actually returned when the suspension occurred. Therefore, macroeconomic influence remains very strong in the current market. Especially, the ECB and Europe are losing their influence.
The European Union is not the only economic block losing strength in this space. Yesterday, the British government announced that inflation was lower than expected, opening the possibility of further interest rate cuts.
This also had a minimal impact on cryptocurrencies. Macroeconomic concerns still affect the cryptocurrency market, but the strongest connections are with the United States and Asia.
These changes in cryptocurrencies became clear months before the ECB's interest rate cut. Tether had to leave the EU due to MiCA regulations, but the impact on its business was minimized.
It remains the world's largest stablecoin and has since taken steps to strengthen integration with U.S. regulations.
Meanwhile, many large cryptocurrency companies are shifting their focus to Asia and the United States and moving away from Europe. Earlier this year, a16z closed its London office and decided to focus on the United States.
Tether moved to El Salvador to secure proximity to the United States and more easily access the Latin American market. This growth region appears more promising than trying again in Europe.
The ECB's interest rate cut had almost no impact on the cryptocurrency market, but this does not mean the industry will ignore the continent entirely. In the future, EU operations will become increasingly less important to large companies.
This reflects a broader trend of international capital moving away from Europe. It is natural for cryptocurrencies to become part of that pattern.
