Bitcoin is currently trading in the range between USD 38,000 and USD 39,000. Europe has not banned cryptocurrency mining, thus possibly encouraging investors to purchase it.
After briefly breaking through above the USD 42,000 level last week, the Bitcoin (BTC) price suffered a collapse. Various contextual factors made the demand for the cryptocurrency not high enough for the value to stay.
However, there could be a change due to two significant news events occurring over the last week. The European Union will not ban cryptocurrency mining, and El Salvador will launch Bitcoin-based bonds, which could drive the sales and price of BTC.
Of course, the market must first react positively to those events regardless of the situations affecting the value of Bitcoin. Joe Biden, the US president, recently issued an executive order about the regulation of cryptocurrencies. Even though that suggested an optimistic outlook to buy BTC, the demand dropped.
Besides, the stock markets suffered losses due to the economic uncertainty about the war between Russia and Ukraine. That situation has increased the purchase of commodities like gold, an asset compared to Bitcoin due to its anti-inflationary features.
That discouraging international context indicates Bitcoin is quite strong, considering its price has remained relatively stable. There is not enough determination from investors to increase their buying power. However, the growing inflation worldwide and the above two crucial events occurring in the industry may encourage investors.
The European Union Decides to Favor Bitcoin Mining
The MiCA bill sought to ban the activities in the cryptocurrency ecosystem, like mining, in the European Union. However, the lack of consensus in Parliament to approve the draft law favored the industry.
Some hodlers would have reacted to the ban on cryptocurrency mining in Europe by getting rid of their coins. That might have caused the price of BTC to drop to USD 30,000, as predicted by renowned analyst Willy Woo.
The market could view the decision by the European Union not to ban cryptocurrency as a positive sign, making that scenario unlikely. That would keep the demand above the support at USD 37,000 and drive the price. However, some parliamentarians may appeal for further discussing the law, creating expectations in the industry and affecting the market.
El Salvador Could Motivate the Purchase of BTC through Bitcoin Bonds
The Salvadoran government is getting ready to issue its Bitcoin-based bonds in the coming days. Simon Peters, a market analyst at eToro, said that no other country had taken a similar step in adopting blockchain technology.
Institutional investors have not yet shown any signs of high demand for the bonds. However, something new in the industry could make enthusiasts worldwide buy Bitcoin.
The initial collection of the bonds will contribute to determining the result. Investors will have to wait to see the volume of demand for that Salvadoran financial instrument. In addition, they have to be attentive to the warnings of leading actors like the International Monetary Fund (IMF).
BTC is trading at around USD 39,550 and has accumulated a 2.2% gain in the last 24 hours. Its daily trading volume is above USD 21.93 billion, and its market capitalization is about USD 750.82 billion, according to CoinGecko.
By Alexander Salazar
