[Bitcoin Now] Concerns Over EU Regulation and Interest Rate Hikes Push Price to $27,000 Range

The European Union (EU) Parliament passed a virtual asset regulation bill for the first time, causing the price of Bitcoin to drop to the $27,000 range. Additionally, concerns over interest rate hikes accelerated the downward trend.

Image source=Reuters·Yonhap News

According to CoinMarketCap, a global virtual asset market tracking site, as of 3:28 PM on the 23rd, the price of Bitcoin was recorded at $27,613 (approximately 36.78 million KRW), up 1.05% from the previous day.

Although Bitcoin showed a rise of over 1% on the day, it had been on a downward trend since the EU Parliament passed the virtual asset regulation package MiCA on the 20th (local time). The price had maintained the $29,000 range but plunged to $27,265 around 11:15 PM the previous day. On the 19th, Bitcoin had stayed above $30,000, raising expectations for price increases, but the regulation package dealt a direct blow.

The EU passed the MiCA bill with 517 votes in favor and 38 against. Additionally, a separate bill mandating virtual asset companies to identify customers to prevent money laundering was passed with 529 votes in favor and 29 against.

MiCA aims to reduce risks for consumers purchasing virtual assets by making virtual asset providers responsible if investors lose their virtual assets. Accordingly, cryptocurrency platforms must inform investors of risks related to platform operations, and the sale of new coins will also be regulated. Platform operators must prepare sufficient reserves for stablecoins to cope with mass withdrawals by investors. The daily transaction volume of stablecoins is also limited to 200 million euros (approximately 292.7 billion KRW). The European Securities and Markets Authority (ESMA) has been granted authority to intervene directly if cryptocurrency exchanges fail to adequately protect investors or threaten financial stability.

Furthermore, concerns over inflation persist, with the UK’s March inflation rate reaching the 10% range, raising the possibility of additional interest rate hikes, which also acted as negative factors.

Meanwhile, virtual asset investor sentiment has recovered to a greed level. According to Alternative, a virtual asset data provider, the Fear & Greed Index representing investor sentiment rose 3 points from 53 (neutral) the previous day to 56 (greed) on the day. It had dropped to 50 (neutral) on the 21st but showed an upward trend. Alternative’s Fear & Greed Index means that a score closer to 0 indicates extreme fear and pessimism about investing, while a score near 100 indicates optimism.