After a prolonged stretch of rate cuts that fueled one of the most aggressive crypto rallies in history, major central banks are pivoting back toward tightening, and the impact on digital assets has been swift and unforgiving.
Bitcoin has shed roughly 52% of its value since late 2025, falling from around $126K to approximately $60K by mid-2026.
The ECB fires the starting gun
The European Central Bank moved first. On June 11, 2026, the ECB raised its deposit facility rate by 25 basis points to 2.25%, marking its first interest rate increase since 2023.
The catalyst was familiar: persistent inflation driven by geopolitical tensions, particularly in oil markets. With crude pushing past $88 per barrel in July, the ECB’s governing council decided that standing pat was no longer an option.
