As a seasoned analyst with years of experience navigating the complexities of the global financial landscape, I find myself increasingly intrigued by the explosive growth witnessed within the European cryptocurrency markets in 2024. The emergence of euro-backed stablecoins, propelled by regulatory clarity provided by MiCA, has not only captured my attention but also piqued the interest of institutional players and liquidity providers across the region.
By 2024, Euro-supported stablecoins became a significant catalyst for expansion within the European cryptocurrency sector. This surge was largely due to the enactment of the Markets in Crypto-Assets Regulation (MiCA).
Indeed, these tokens have recently set a new monthly volume high by capturing interest and investment from both retail and institutional investors throughout the region.
MiCA Spurs Euro-Backed Stablecoin Adoption
In November, the monthly value of euro-backed stablecoins hit a record high over several years, soaring close to €800 million, as per a recent report by research firm Kaiko and crypto exchange Bitvavo. A major factor contributing to this spike is thought to be the increased popularity of Banking Circle’s EURI stablecoin, following its listing on Binance, which seems to have garnered substantial attention.
By the end of the year, other MiCA-compliant stablecoins like Circle’s EURC and Société Générale’s EURCV, collectively accounted for a significant 91% share in the euro-backed stablecoin market, contributing to its overall growth.
The clarity offered by MiCA, effective since June, has played a significant role in bolstering investor trust, increasing market liquidity, and enticing institutional investors. Nevertheless, Tether’s choice to discontinue support for its Euro-tied stablecoin, EURT, due to regulatory issues, underscores the ongoing hurdles within the rapidly changing landscape.
Explosive Growth in European Crypto Markets
Viewing the situation from a distance, the European cryptocurrency market underwent remarkable expansion in 2024. Trade volumes using the Euro soared to unprecedented heights, with weekly trades exceeding €12 billion in November – more than twice October’s figures. Furthermore, Bitcoin reached an unprecedented high of over $100,000 during this period.
In international cryptocurrency exchanges, the Euro has strengthened its status as the third most frequently traded traditional currency, following the US Dollar and South Korean Won. Moreover, the proportion of Bitcoin trading involving the Euro has significantly increased, climbing from 3.6% to almost 10%. This increase can be attributed to enhanced regulatory environments and an upward trend in institutional investment towards Bitcoin.
In 2024, major European cryptocurrency platforms such as Bitvavo, Kraken, and Coinbase made significant strides, with Bitvavo dominating euro-based trading, handling around half of the market. These exchanges broadened their selection substantially, introducing more than 331 new euro pairs to cater to increasing demand. Moreover, liquidity in the euro market significantly increased, as the collective 1% market depth for euro pairs doubled by November.
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2024-12-23 07:38