Bybit CEO: MiCA License Alone Insufficient for Profitability in Europe

Securing a Markets in Crypto Assets license is a crucial step for operating in Europe, but it is not enough to guarantee profitability, according to Bybit's CEO, Ben Zhou. The MiCA license has limitations, as it does not cover a wide range of products such as derivatives and tokenized assets, which are essential for generating revenue. To access these products, companies require additional licenses, including a MiFID II license and an Electronic Money Institution license. Zhou explained that even with a MiCA license, companies can only facilitate fiat-to-crypto and crypto-to-crypto transactions, which is not sufficient to sustain a profitable business. Bybit, the world's second-largest cryptocurrency exchange by trading volume, is still far from breaking even in Europe and is relying on its size to absorb the costs. The company's profitability timeline in Europe is contingent upon acquiring the necessary licenses. Zhou predicts that market consolidation is imminent, particularly with the MiCA grandfathering period ending soon, which will likely lead to the demise of many small to medium-sized crypto companies. The regulatory landscape is also evolving, with some countries advocating for stricter control and increased oversight. Zhou believes that Bybit's decision to work with a stringent regulator in Austria will pay off in the long run, despite the potential for increased bureaucracy with the involvement of the European Securities and Markets Authority.