Bitcoin is trading below recent highs, yet it remains central in a weaker market as dominance climbs again and large investors keep buying. Morgan Stanley’s recent ETF purchase added to that trend, while the European Union approved new anti-money-laundering rules targeting regulated crypto firms and privacy coins. At the same time, direct Bitcoin transfers between private wallets stay outside mandatory identification checks under the bloc’s framework.
In mid-2025, Bitcoin traded near its highs, while its dominance fell as traders took more risk in altcoins. Market conditions later changed, and by 2026, Bitcoin’s price had dropped from local highs.
During that shift, Bitcoin dominance moved higher again. That move pointed to a change in investor behavior, with capital drifting away from riskier parts of the market and back toward Bitcoin.
The preference for Bitcoin also appears in large investor activity. Arkham data showed Morgan Stanley holding more than $270 million in Bitcoin. Recent inflows arrived while other ETF-linked players were selling. That made Morgan Stanley’s activity stand out in a period when demand moved unevenly across the sector.
The buying also matched the wider pattern described in the report. Even in a weak market, Bitcoin continued to draw the most attention from institutions and traders.
The European Union approved anti-money laundering rules that will ban regulated crypto firms from supporting privacy coins. The rules will take effect on July 10, 2027, under Regulation (EU) 2024/1624. Under the new framework, crypto-asset service providers in the bloc must apply stricter customer checks. They must carry out full due diligence for occasional crypto transactions worth €1,000 or more.
For smaller transactions, providers still need to identify customers. They do not need to apply the same level of verification used for larger transfers or ongoing business relationships. The regulation also bars anonymous crypto accounts and services that increase transaction obfuscation. That includes services involving anonymity-enhancing cryptocurrencies.
Read More: BTC Inflows Cool as ETF Outflows Keep Demand Under Pressure
Even so, the rules do not ban people from owning privacy-focused assets or using them privately. The clarification published with the regulation says the identification requirements apply to service providers, not every blockchain transaction.
Separate rules under Regulation (EU) 2023/1113, known as the Travel Rule framework, still require regulated providers to pass sender and recipient information during crypto transfers. Extra checks apply when self-hosted wallet transfers reach €1,000 or more and a regulated intermediary is involved. Users on exchanges and other regulated platforms must complete know-your-customer procedures. At the same time, peer-to-peer Bitcoin transfers without an intermediary do not trigger direct identity verification under EU law.
Bitcoin is regaining strength as investors move back to the most liquid asset in a weaker market, while Morgan Stanley’s buying adds institutional support. At the same time, the EU is tightening crypto rules, especially for regulated firms and privacy coins, making compliance a bigger focus across the market.