Bybit CEO Ben Zhou told CoinDesk that a Markets in Crypto Assets (MiCA) license isn’t enough to turn a profit in Europe. The world’s second-largest cryptocurrency exchange by trading volume is at least two years away from breaking even on the continent, he said, because MiCA covers only a fraction of the products needed for a sustainable business.
“With the current MiCA system, you can only do fiat-to-crypto, crypto-to-crypto,” Zhou said. “There are many elements of a profitable business you can’t do.”
The License Stack Problem
Under MiCA, crypto firms receive authorization to operate across the entire European Economic Area – all 27 EU member states plus Norway, Iceland, and Liechtenstein. That sounds like a strong foundation. In practice, Zhou argues, it’s barely the beginning.
To offer derivatives, perpetual futures, and tokenized assets – the products that actually generate meaningful revenue – exchanges need additional authorizations: a MiFID II (Markets in Financial Instruments Directive) license for securities-related products and an Electronic Money Institution (EMI) license for payment services.
Zhou pointed to Kraken, Bitpanda, and Bitvivo as examples of exchanges already profitable in Europe precisely because they hold multiple overlapping licenses. For firms relying solely on MiCA, the math doesn’t work.
“We don’t make money under the current MiCA license. But we’re able to afford it because we’re a big entity. For us, it’s a long-term investment,” Zhou said. “I would assume we’re probably going to be profitable within two years.”
Market Consolidation Is Coming Fast
The timing of Zhou’s comments is significant. MiCA’s grandfathering period – the window that allowed firms to continue operating under pre-existing national regulations – expires at the end of June. Starting July 1, any crypto firm without MiCA authorization will be locked out of the European market entirely.
That deadline is expected to eliminate a significant number of small and mid-sized crypto companies that can’t absorb the compliance costs.
“There’s going to be market consolidation,” Zhou said. “These guys are shutting down because even if they know they could afford MiCA, they’re like, ‘I need MiFID and EMI to make money, and I need to make a whole lot of investment in compliance infrastructure to be profitable.'”
The consolidation pressure is compounded by regulatory ambiguity. Each member state interprets MiCA differently, creating an uneven playing field. Some countries use it to attract business; others impose stricter requirements than the regulation demands.
Austria’s Strict Regulator as a Strategic Choice
Bybit chose Austria’s Financial Market Authority (FMA) as its MiCA regulator, a deliberate decision that Zhou said would pay off long-term despite the stricter oversight.
“Some countries interpret it as a way to attract new business; some want heavy regulation. So you actually have different levels of strictness,” he explained.
The European Securities and Markets Authority (ESMA) has emerged as a potential centralizing force. Some national regulators in France, Austria, and Italy have called for ESMA to take a more active oversight role, which could standardize enforcement but also introduce bureaucratic delays.
Zhou expressed neutrality on the ESMA question but flagged a practical concern: “If we’ve any issues, we just send an email and go to FMA in Vienna. But if everyone’s in Paris, then you’ve to line up. There are more CASPs, increased bureaucracy, decreased efficiency.”
What This Means for the European Crypto Market
The implications extend beyond Bybit. If the world’s second-largest exchange can’t break even in Europe with a MiCA license alone, the barrier for smaller competitors is even steeper. The July 1 deadline will likely trigger a wave of exits, acquisitions, and partnerships as firms scramble to either stack additional licenses or find buyers willing to absorb their operations.
ESMA recently reminded crypto firms offering perpetual futures that some of these products may fall outside MiCA’s scope entirely, adding another layer of regulatory uncertainty for exchanges trying to build revenue-generating product suites.
The European crypto market in the second half of 2026 will look materially different from today. Fewer players, higher compliance costs, and a clearer division between the licensed incumbents and everyone else.
FAQ
What is MiCA and why isn’t it enough for profitability?
MiCA (Markets in Crypto Assets) is the EU’s complete crypto regulatory system. It covers basic crypto trading services but doesn’t extend to derivatives, tokenized assets, or payment services – the high-margin products that exchanges need to be profitable.
When does the MiCA grandfathering period end?
The grandfathering period ends June 30, 2026. From July 1, all crypto firms must hold MiCA authorization to operate in the European Economic Area. Firms without it will be forced to shut down or exit the market.
Which additional licenses do crypto exchanges need in Europe?
Beyond MiCA, exchanges typically need a MiFID II license for derivatives and securities-related products, and an EMI (Electronic Money Institution) license for payment services. Only firms with all three can offer the full product range needed for profitability.
*Sources: CoinDesk, CryptoNews.net, CoinMarketCap*
