Investing.com -- European central banks are predicted to start accumulating Bitcoin this year, according to Fiorenzo Manganiello, a leading blockchain expert and co-founder and managing partner at LIAN Group. This prediction comes in light of the recent implementation of the European Union's Markets in Crypto-Assets (MiCA) regulation.
The first MiCA licenses are being given to cryptocurrency exchanges following the regulation's transitional phase, which began in December 2024. Manganiello believes that with the security of MiCA's stringent rules, traditional investors will be more inclined to participate in the market. This could lead to the reduction of volatile market cycles and potentially prompt European central banks to create a Bitcoin reserve in 2025.
Bitcoin's strength continues to grow, recently hitting a new high of $109,000. While the re-election of Trump has added to the market's enthusiasm, Manganiello has stated that Bitcoin's market volatility will soon end. He anticipates a surge of European financial institutions entering the market soon.
The new MiCA rules are expected to encourage previously hesitant institutional investors to increase their exposure to Bitcoin. Despite the EU's traditionally cautious stance towards digital assets, the introduction of these robust regulations will likely boost investor confidence in cryptocurrencies.
As a result, Manganiello predicts that European central banks will start building their Bitcoin reserves in 2025. As Bitcoin becomes more stable, liquid, and profitable, it's only a matter of time before European central banks start to diversify their holdings with the cryptocurrency to hedge against traditional market volatility.
Manganiello stated, “As the EU’s new MiCA regulation reassures the crypto skeptics, I’m sure we’ll see not only institutional investors but even central banks looking to Bitcoin. These rules will give traditional investors and financial institutions the confidence they need to enter the market.
Bitcoin is becoming too dominant to ignore, and this year, I think we’ll see some European central banks begin to build their reserves of the currency to diversify their holdings and strengthen their defenses against traditional market volatility."
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