Regulation
Bitfinex Analyst: The European Elections Could Be a Decisive Moment for Cryptocurrencies: Here’s Why
As the European Union (EU) prepares for parliamentary elections next week, the cryptocurrency sector is bracing for potential regulatory changes that could have a significant impact on its future trajectory. According to Jag Kooner, head of derivatives at Bitfinex, the outcome of this election could lead to tighter controls or accelerated supporting regulations, depending on the political landscape.
Election impact on cryptocurrency regulation
European bitcoin exchange traded products (ETPs) have faced significant outflows totaling $506 million this year, despite the approval of spot bitcoin ETFs in the United States. This inconsistency highlights the uncertainty surrounding cryptocurrency regulation in the EU.
Meanwhile, Jag Kooner, head of derivatives at Bitfinex, highlights the key role of the upcoming European elections in shaping regulatory frameworks, especially regarding implementation of the Markets in Crypto Assets (MiCA) framework.
According to him, a right-wing shift in the political landscape could lead to tighter controls on cryptocurrencies, while a pro-crypto result could accelerate the adoption of support measures such as MiCA.
“The upcoming elections are crucial for the implementation of the MiCA regulation,” says Kooner.
MiCA aims to establish a unified regulatory framework for cryptocurrencies across the EU, providing legal clarity and potentially attracting more investment. However, the pace and enthusiasm with which these rules are implemented will depend on the election results.
Times and complexity of elections
The elections, scheduled from 6 to 9 JuneThe 2024 European Parliament elections mark a significant moment, coinciding with numerous other political events, such as Brexit and various national elections in EU member states.
This convergence of events adds complexity to an already crucial moment in EU politics and regulation.
European and US crypto funds
A notable indicator of investor sentiment within the EU cryptocurrency market is the flow of bitcoin exchange-traded products. While European Bitcoin ETPs have seen consistent outflows since inception. On the other hand, European Bitcoin ETPs manage approximately $6.4 billion worth of assets US funds boast significantly higher figures, for a total of 53.5 billion dollars in April.
As the European elections approach, the crypto community remains on edge, awaiting the outcome that could shape the future of cryptocurrency regulations in Europe.