Analysis of the European Crypto Market
Feb 8, 2018 · 5 min read

For generations, Europe was the center of learning and innovation in the world. Many of the advances in science and learning from the Middle Ages to the dawn of the modern world came from Europe. Over time, technology seems to have shifted to America and Asia but Europe still remains a fertile ground for technological advancement. The entire region is built upon a desire to remain relevant and up-to-date with the latest technologies.

In today’s world, cryptocurrency seems to be at the heart of business and technology. There are lots of innovations being brought about by blockchain technology and the cryptocurrency market is growing at an astronomical rate. While each member country is sovereign, the European Union is responsible for maintaining the economic stability of the region which is largely dependent on the value and stability of the Euro. To this end, the EU seems to be paying a lot of attention to the cryptocurrency market. The following is an analysis of the how the cryptocurrency market looks like in Europe.

Cryptocurrency Exchange Platforms in Europe

Carrying out an analysis of a national cryptocurrency market can be quite daunting not to talk of a regional or global one. In 2017, Cambridge University released a study that it had carried out on the global cryptocurrency market. According to the report, Europe is the region with most cryptocurrency exchange platforms.

Many of these cryptocurrency platforms that allow fiat transactions also offer SEPA transfer as a payment method. SEPA stands for Single Euro Payments Area which basically makes international money transfer within the EU to be equivalent to domestic money transfer within a European country. When using SEPA transfer for crypto exchange/trading, it is usually at no cost. This makes it an attractive proposition for many Europeans in the crypto market. The volume of SEPA cryptocurrency transactions has been able to establish the Euro as the second most used fiat currency in crypto transactions after the dollar

Like in many other regions, most European cryptocurrency exchange services are in control of the private keys of their customers. As a result, they are always a target for hackers and cybercriminals. In order to mitigate against the risk, many European cryptocurrency platforms keep the bulk of their crypto holdings in cold wallets. Some of the popular European cryptocurrency platforms include Bitsane, Bitpanda, Kraken, and Bitstamp. The major cryptocurrencies like BTC, LTC, ETH, XRP, and BCH are supported by many of the European cryptocurrency exchange platforms.

ICOs in Europe

A 2017 report carried out by Atomico, a venture capital company showed that Europe accounted for almost half of the funding raised by ICOs. More than 40 percent of all ICOs are based in EU member countries with the region raising more from token sales than any other region of the world. The report which was titled “the state of European Tech” was conducted in conjunction with the ICO tracking service, Token Data.

The dominance of European-based ICOs is indicative of a growing trend of blockchain technology adoption far beyond the realms of cryptocurrency operations only. Many of the blockchain enterprises that have carried out these ICOs are focused on intuitive blockchain applications. The projects are working on the intersection of blockchain with concepts like IoT and AI.

The general consensus is that blockchain technology is popular in Europe especially from the standpoint of designing innovations in finance, renewable energy projects etc. Some of the highest grossing ICO campaigns like Tezos are domiciled in the Eurozone. According to the report, there are also more Bitcoin nodes in Europe than there are in any other region of the world.

Wallet Services in Europe

Going back to the 2017 Cambridge study of the global cryptocurrency market, there are more Wallet providers located in Europe than anywhere else on the planet. European wallet providers account for 42 percent of the total number of wallet providers in the global cryptocurrency market. This fact isn’t in any way surprising seeing as the region has the highest number of cryptocurrency exchange platforms. Most exchange platforms also provide wallet services, albeit it is always advisable not to hold large amounts of cryptos on online wallet services.

Despite the fact that Europe holds the largest number of wallet providers and exchange platforms, the majority of wallet users don’t come from Europe. Many of them come from Asia-Pacific and the Middle East. With the blanket ban imposed by China on exchange platforms, many Chinese were forced to resort to foreign exchange platforms and their wallet services. The European wallet users for their part seem to prefer to use relatively small wallet providers according to the Cambridge report.

Crypto Regulations in Europe

The EU and the ECB have in recent times been working hard to introduce regulations into the cryptocurrency market. Since 2017, there have been efforts on many fronts both national and regional to create a more regulated European cryptocurrency market. As always, the protection of the Euro is a vital aspect of the activities of the EU and ECB. Though not yet identified as a veritable threat to the stability and value of the Euro, there have been moves to dilute the influence of cryptocurrency in the region.

In 2017, the EU Parliament passed a resolution to introduce regulations into the cryptocurrency market. The resolution is currently being ratified by EU members countries. Both UK and EU financial regulators have been clamoring for more robust KYC and AML regulations for the cryptocurrency market. The threat of cryptocurrencies being used for illicit and illegal activities like money laundering, tax evasion, and terrorist funding remains ever present. Europe has suffered a number of devastating terrorist attacks in recent years and authorities are determined to make sure the cryptocurrency market isn’t being exploited by terrorists to funnel money for their operations.

On a national level, countries like France, the UK, Portugal, and Germany have all supported the call for stricter regulations in the market. France has even created a working group that will facilitate the establishment of regulations within the country’s crypto market. Despite the fact that Bitcoin is a legal currency in Germany, the country has teamed up with France to try to convince Argentina to raise up the issue of crypto regulations during the next G20 summit.

While the cryptocurrency market might become highly regulated in Europe, the region continues to lead the way in blockchain applications. As it stands presently, the region is at the heart of all things blockchain and crypto related.

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