According to Bitfinex head of derivatives Jag Kooner, next week’s European Union parliamentary elections could provide further clues as to how cryptocurrencies will be regulated in that market.
“A right-wing shift could lead to stricter cryptocurrency controls, while a cryptocurrency-friendly outcome could accelerate supporting regulations like MiCA,” Kooner told The Block.
Bitfinex analysts said investors will be watching the EU election for regulatory clues, which could have a major impact on the broader cryptocurrency market in June and next month.
Impact on MICA Framework Implementation
Kooner noted that the upcoming EU elections are very important in shaping the bloc’s legislation, especially the implementation of the Markets in Crypto Assets (MICA) framework. He added that any possible outcome of strengthening populist parties could affect the regulatory stance, potentially leading to tighter controls or more supportive policies depending on the makeup of the new parliament.
“The upcoming elections are critical for the implementation of MiCA regulations. MiCA aims to create a unified regulatory framework for cryptocurrencies across the EU, providing legal clarity and potentially attracting more investment, depending on the election results. These regulations will determine the pace and enthusiasm of progress,” Kooner added.
The 2024 European Parliament elections are scheduled to be held from June 6 to June 9. This election will be the 10th parliamentary election since the first direct elections in 1979 and the first European Parliament election since Brexit. Additionally, this election will be held simultaneously with several other elections in various EU member states.
European ETPs suffer from monthly outflows.
One indicator of the preference for cryptocurrency assets within the block is the flow dynamics of Bitcoin exchange-traded products (ETPs). According to the Financial Times, Morningstar data shows that Bitcoin ETPs in Europe have experienced outflows every month this year.
The FT report added that Europe-based Bitcoin ETPs have experienced outflows totaling $506 million since the beginning of the year. However, during this period, the price of Bitcoin rose by about 40% due to inflows into US-based Bitcoin spot exchange-traded funds (ETFs).
Bitcoin ETPs in Europe had approximately $6.4 billion in assets under management as of the end of April. By contrast, U.S. funds had total assets of $53.5 billion in the same month, the report said.
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