Torsten Slok, Chief Economist at Apollo Global Management, sees the European Central Bank potentially raising rates again in September. The call comes after the ECB already hiked its deposit facility rate by 25 basis points to 2.25% on June 11, its first increase since September 2023.

Slok isn’t alone in this view. A Reuters poll conducted on June 3 found that 49 out of 80 economists expected an additional ECB rate hike at the September meeting. That’s over 60% of surveyed economists betting on more tightening before year-end.

The end of easy money in Europe

The June hike marked a decisive shift toward a more hawkish stance, driven largely by inflationary pressures tied to the ongoing Iran conflict. Energy costs, supply chain disruptions, and geopolitical uncertainty have forced the ECB’s hand in ways that seemed unlikely just months ago.

The ECB’s next scheduled meetings are July 23 and September 10. If Slok and the majority of polled economists are right, the September meeting could bring the deposit rate to 2.50%.

Slok’s credentials lend weight to the prediction. He’s served as Apollo’s Chief Economist since 2020, following 15 years at Deutsche Bank and earlier stints at the IMF and OECD.

What rising eurozone rates mean for crypto

When central banks raise rates, the opportunity cost of holding non-yielding assets goes up. Research on the transmission channels between ECB policy and digital asset prices has identified what economists call portfolio rebalancing effects. Rising long-term rates in the eurozone put downward pressure on Bitcoin and Ethereum as institutional investors shift allocations toward newly attractive fixed-income instruments.

The market reaction to the June hike itself was relatively muted. Traders appeared more focused on US inflation data at the time, treating the ECB move as largely priced in.

Both Bitcoin and Ethereum have historically responded negatively to rising long-term interest rates.

What investors should be watching

The July 23 ECB meeting will be the next inflection point. Even if the bank holds rates steady in July, the language in its policy statement and press conference will be dissected for clues about September. Forward guidance could move markets well before the actual September 10 decision.

With over 60% of economists now anticipating another eurozone rate increase, crypto traders should treat ECB meeting dates with the same seriousness they give to FOMC announcements. Traders positioned in Bitcoin and Ethereum should be modeling scenarios for both outcomes, because at 2.25% and potentially climbing, the ECB’s deposit rate is no longer something crypto markets can afford to ignore.