Bybit CEO: MiCA Alone Won't Yield Profits, Firms Need More Licenses
Bybit CEO Ben Zhou says a MiCA license isn’t enough for profitability in Europe; firms also need MiFID II and EMI licenses. As the June deadline looms, smaller firms face consolidation. Bybit expects to break even in two years after additional licensing.
Quick Take
MiCA covers only spot crypto trading, limiting revenue.
Additional licenses needed for derivatives and tokenized assets.
MiCA grandfathering ends June 2026, threatening smaller firms.
Bybit chose Austria’s FMA and expects break-even in 2 years.
Market Impact Analysis
BearishStricter licensing reduces market fragmentation and could squeeze out smaller innovators, while larger exchanges benefit, creating a more concentrated but potentially less dynamic European crypto landscape.
Speculation Analysis
Key Takeaways
- MiCA covers only spot crypto-to-fiat and crypto-to-crypto trading, choking revenue streams.
- Additional MiFID II and EMI licenses are needed for derivatives and tokenized assets.
- Bybit, the world's second-largest exchange, expects no EU profit for at least two more years.
- Small firms will likely shut down or consolidate as MiCA grandfathering ends by July 2026.
What Happened
Bybit CEO Ben Zhou bluntly told CoinDesk that a MiCA license alone won't make a crypto exchange profitable in Europe. The framework's narrow scope — limited to spot fiat-to-crypto and crypto-to-crypto — excludes lucrative products like derivatives and tokenized assets. To fill the gap, firms must secure additional MiFID II and EMI licenses. "Even as a MiCA holder, unless you're already making money because you have multiple licenses, you can't sustain a business," Zhou said. With the July 2026 grandfathering deadline closing fast, the scramble for compliance is separating the well-capitalized from the soon-to-be-consolidated.
The Numbers
MiCA's product restrictions leave exchanges with a thin revenue base. The license supports only spot trading pairs — no perpetuals, no options, no tokenized securities. Bybit, the world's second-largest exchange by volume, still operates at a loss in Europe under the current framework. Zhou projects profitability within two years, contingent on securing additional licenses. Meanwhile, the clock is ticking: MiCA's grandfathering provision expires by July 1, 2026, forcing all firms to be fully authorized or exit the market. Bybit chose Austria's Financial Market Authority (FMA) as its regulator, betting on a stringent but predictable path.
Why It Happened
MiCA was designed to bring clarity, not completeness. It left out complex financial products to avoid overlapping with existing EU directives. The result is a patchwork where crypto firms must navigate multiple regulatory tracks to offer a full suite. Zhou's comments echo a broader frustration: even compliant exchanges can't turn a profit without MiFID II for derivatives and an EMI license for electronic money services. The cost and complexity of stacking these licenses are pushing smaller players toward the exit, while large incumbents like Bybit treat it as a long-term investment. Profitability, Zhou says, is at least two years away.
Broader Impact
The MiCA deadline will accelerate market consolidation. Well-funded firms will scoop up smaller competitors or their customer bases. ESMA's push for more centralized oversight may further tighten the rules, adding bureaucracy but also leveling the playing field. For Europe, this means fewer, more regulated crypto operators — likely a net positive for investor protection but a loss in innovation diversity. Bybit's choice of Austria's strict regulator signals that compliance rigor will be a competitive differentiator going forward.
What to Watch Next
- Watch the panic among smaller EU crypto firms as the July 2026 deadline approaches — consolidation deals may surge.
- Track Bybit's licensing progress: MiFID II and EMI applications will reveal how fast it can unlock new product lines.
- Monitor ESMA's evolving stance on perpetuals and whether it forces even stricter interpretations before MiCA is fully enforced.
This article is for informational purposes only and does not constitute financial advice.
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