Uncertainty in crypto markets after the European Parliament elections

As a result of some political and macroeconomic changes, the level of unpredictability in the crypto market is increasing. In particular, investor attitudes were influenced by the results of the European parliamentary elections, thus complicating the market order.

Investors are not sure what will happen to the laws governing digital assets, as well as stability within their markets due to the different economic indicators given by individual countries, along with these political changes in Europe.

Recently, far-right parties have won more seats in the recently concluded European Union elections, thus changing the political landscapes, especially in such countries as France, Germany or Austria, among others. For example, Marine Le Pen's National Assembly won over the party "The Renaissance' of Emmanuel Macron in France, thus forcing him to call for early parliamentary elections.

This victory for the right illustrates a broader anti-systemic shift in the European crypto sphere. The European Parliament is still dominated by the established parties with its 705 members, but they are increasingly challenged by the rise of far-right groups.

These changes have major implications for cryptocurrencies. According to Jag Kuhner, who heads the department “Derivatives' on Bitfinex - if there is a tilt to the right, it could mean tighter regulations on digital assets.

There are concerns that conservative-leaning governments create a restrictive regulatory environment, while others believe that such rules will be more lenient under left-leaning or centrist leaders; for example, the MiCA framework proposed by the European Commission within crypto-asset markets was largely developed with the interests of liberal parties in mind.

Along with political changes, recent economic indicators have further complicated the outlook for the crypto market. Last week, the European Central Bank (ECB) announced an interest rate cut of 25 basis points, which initially boosted investor optimism. The move was seen as a potential driver of economic growth and support for risk assets, including cryptocurrencies.

However, optimism waned on Friday following the release of stronger-than-expected US employment data. Strong employment data dampened hopes for a similar rate-cutting approach by the Federal Reserve.

The crypto market reacted negatively, retreating as investors reassessed their expectations for US monetary policy. The divergence between European interest rate cuts and a potentially more hawkish stance by the Federal Reserve has introduced additional uncertainty, which has weighed on investor confidence in the crypto market.

However, market experts are positive about the future of the cryptocurrency market. There has been significant inflow into US spot ETFs recently for Bitcoin , indicating that institutional interest is increasing. Additionally, crypto analyst Ali Martinez eased concerns about the market sinking.

Toy mentioned in a recent X post that short-term Bitcoin investors are making gains of 3.35%, implying "little risk" for further BTC selloffs. At the time of writing, the cryptocurrency market cap is down 0.20% to $2.54 trillion.