The bitcoin (BTC) exchange rate rose 2% on Thursday after the European Central Bank (ECB) said that the latest interest rate hike could be the last. In its statement, the ECB indicated that its key interest rates have reached levels that are largely conducive to getting inflation back on target in a timely manner. The bank raised three important interest rates by 0.25%, bringing the primary deposit rate to 4% from -0.5% in June 2022.

Analysts were already skeptical of another rate hike at the September meeting, with markets estimating a 63% chance of such an increase. However, the current rate is still below inflation forecasts. The ECB now expects inflation to average 5.6% in 2023 and 3.2% in 2024, which is higher than previous forecasts due to an increase in the energy price outlook.

The ECB emphasized that underlying price pressures remain significant, even though some signs of them have started to ease. Tightening financial conditions are also dampening demand, which is crucial for inflation to return to target. The bank forecasts that the euro area’s economic growth rate will slow significantly to 0.7% in 2023 and 1.0% in 2024.

Interest rate hikes by central banks such as the ECB and the Fed have impacted investment in risk assets such as equities and cryptocurrencies. Bitcoin temporarily surpassed the $30,000 mark in March 2023 following the launch of the U.S. Federal Reserve’s Emergency Bank Financing Program.