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<h2 id="key-points">Key Points</h2>
<ul>
 <li>Bitcoin inflows may increase due to the European Central Bank’s (ECB) potential interest rate cut.</li>
 <li>Despite mixed historical correlation with equities, Bitcoin could benefit from a stimulus-driven environment.</li>
</ul>
<p>The European Central Bank’s (ECB) upcoming monetary policy decision could potentially lead to an increase in <a href="https://crypto.ro/en/cryptocurrencies/bitcoin/" rel="noopener noreferrer nofollow">Bitcoin</a> inflows.</p>
<h2 id="ecb-s-interest-rate-cut-and-its-impact">ECB’s Interest Rate Cut and its Impact</h2>
<p>The ECB is likely to reduce interest rates by 0.25%, bringing it down to 4.25% on June 6. This rate cut could stimulate investor interest in risk assets like Bitcoin, says Jag Kooner, Head of Derivatives at Bitfinex.</p>
<p>Kooner explained that lower rates typically weaken the euro and increase liquidity, which can boost risk assets, including Bitcoin. This expectation comes at a time when Europe is experiencing slowing inflation.</p>
<h2 id="bitcoin-and-equity-markets">Bitcoin and Equity Markets</h2>
<p>The potential interest rate cut could positively impact traditional equity markets and provide an upward push for Bitcoin, according to James Wo, Founder and CEO of DFG.</p>
<p>Wo stated that a rate cut could lead to a shift in liquidity to more risk-on assets such as Bitcoin, thereby boosting its price. Europe’s flagship stock indexes, the STOXX 600 and DAX 40, along with Bitcoin price, saw an increase in May.</p>
<p>However, Bitcoin’s correlation with the traditional equities market has been inconsistent. In an economic stimulus-driven environment, Bitcoin may benefit alongside equities due to increased liquidity, suggests Kooner.</p>
<p>Despite the lagging equities market in the United States, Bitcoin price saw a strong rally this year. The S&amp;P 500 index rallied over 11.5% year-to-date (YTD), while Bitcoin price rose over 57.6% YTD.</p>
<p>Kooner added that while US equities have retraced, Bitcoin has remained strong. It remains to be seen if this is crypto lagging or showing relative strength.</p>

European Central Bank Rate Cut Could Fuel Bitcoin Surge

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