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Cryptocurrency market in Europe evolves amidst crypto winter

The latest publication of the Germany-based market intelligence firm yStats.com, “Europe Blockchain and Cryptocurrency Market 2023”, gives an in-depth overview of the cryptocurrency market and the upcoming trends within the European market. Some key highlights of the report include the top reasons identified for investing in crypto within Europe as well as the growth trajectory of the crypto market across the European market.

Despite the slow-growing crypto market in Europe, the crypto crash speeded up the process of introducing tighter crypto regulations

With the global value of cryptocurrency payments estimated to reach billions of euros by 2022, the cryptocurrency market evolved gradually globally, and the European continent was no exception to this. However, the growth of crypto in Europe is rather slow, for instance, the majority of surveyed respondents across 4 major economies of Europe such as Germany, Austria, Switzerland, and France indicated that they had not made an investment in cryptocurrency as of June 2022, as spelled out in the new yStats.com report. Moreover, a small percentage of households surveyed indicated that they own cryptocurrency. Furthermore, the respondents who believed crypto to be the future of money were several percentage points lower in Europe as compared to the rest of the world as of February 2022. Nevertheless, in H1 2022, more than half of surveyed crypto owners planned to increase their current crypto holdings over the next 12 months, with the share of the younger age group between 18-39 years estimated to be more enthused than older generations when it comes to increasing crypto holdings. As the market sentiments were positive during H1 2022, the demand for trading/holding and staking of crypto assets among crypto owners increased in Europe. During the same time period, Bitcoin, followed by Ethereum was the most favored cryptocurrency among crypto owners. The crash of the crypto market worldwide in 2022 had similar consequences in Europe as were witnessed across the globe, with investors withdrawing their crypto investments. However, rapid devaluation gave rise to the introduction of tighter regulations surrounding cryptocurrency in Europe. With the recent fall of crypto exchange FTX and the bankruptcy of BlockFi, authorities in Europe agreed to establish licensing and supervision rules as early as 2024, as mentioned in the new yStats.com report. Lawmakers in the EU expect that the new crypto rule book in Europe will protect customers, market integrity as well as financial stability. Although the fall of FTX followed the crypto crash and impacted cryptocurrency growth worldwide, Europe faced limited consequences of the fall. In Europe, countries such as Cyprus were most affected by the fall of FTX, while countries such as Germany, Netherlands, and France saw limited impact due to the national regulations that saved them from experiencing a severe loss.

Larger European economies such as Germany, France, and the UK witness slow adoption of crypto

Compared to other regions of the world, European nations are witnessing slower growth of digital assets. For example, in the UK a low percentage of surveyed respondents claimed to own cryptocurrency as of March 2022, and the survey revealed a large gender gap in terms of crypto ownership, as revealed by the yStats.com report. Among those who owned cryptocurrency, a majority preferred to own Bitcoin, followed by Bitcoin cash. In Germany, more than three-quarters of the surveyed population find it unlikely that cryptocurrency will replace national currency as of June 2022. A single-digit percentage of adults in France had invested in cryptocurrency as of December 2021, while among those who have not invested but intend to do so, Bitcoin was the most preferred cryptocurrency. Nearly half the surveyed respondents in France refrained from investing in crypto due to a lack of knowledge of how the assets work.