- The RBA raised the cash rate by 25 basis points to 4.6%, its highest level since 2011.
- Middle East conflict, higher energy costs, AI-related demand and domestic pressures are contributing to inflation.
- Higher rates can weigh on crypto by making cash and yield-bearing assets more attractive to investors.
- Bitcoin and Ethereum edged higher on the day, while Zcash remained down sharply over the week despite its recent rally.
At Tuesday’s meeting, the Reserve Bank of Australia (RBA) decided to raise the cash rate by 25 basis points to 4.6%. The hike pushes the cash rate to its highest level since 2011, when it stood at 4.75%. This puts Australia alongside other major economies that have recently raised rates.
RBA Governor Michele Bullock said “there are a number of pressures all bearing down on inflation at the moment”.
One reason is the ongoing conflict in the Middle East, particularly the US-Iran war, with continued disruptions to global oil supplies pushing up energy prices. Another inflation driver is strong AI-related demand, particularly for data centres and chips.
Read more: Goldman Brings $100B Treasury Fund to Crypto Firms Without Tokenising It
The RBA also pointed to domestic issues such as weak productivity growth and excess demand. It added that “firms are experiencing cost pressures and are either increasing the prices of their goods and services or looking to do so”.
This was the fourth rate increase in Australia in 2026. After years of near-zero rates, the RBA lifted the cash rate from 0.1% in 2022 to 4.35% in 2025, before cutting it to 3.6% later that year. The board said Tuesday’s decision was unanimous.
Higher interest rates make it more attractive for investors to hold cash and yield-bearing assets rather than risk assets such as crypto.
Crypto Market Shrugs Off RBA Hike
The crypto market cap has risen 0.68% in the past 24 hours and currently sits at US$2.85 trillion (AU$4.08 trillion).
Bitcoin (BTC) gained 0.4% on the day but is down 3.64% over the week, currently trading at US$83,338 (AU$119,549). Ethereum (ETH) is up 0.43% on the day but down 3.17% over the week, trading at US$2,671.83 (AU$3,832.98).
Related: Bitcoin and Ether Treasuries Surge as Corporate Buying and ETF Inflows Accelerate
Zcash (ZEC), which has posted significant gains in recent weeks, is up 2.4% on the day but down 12.17% over the past week. It is trading at US$1,416.70 (AU$2,032.38).
Zcash has rallied roughly 2,000% over the past 12 months and hit a high of US$1,650 (AU$2,367.07) a few days ago. It now ranks ninth by market capitalisation. 21Shares recently launched Europe’s first Zcash exchange-traded product (ETP), $ZCASH, which trades on Euronext Amsterdam and Euronext Paris.
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