Bybit: MiCA Won't Deliver Profitability in Europe

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Bybit CEO Ben Zhou told Coindesk on April 26, 2026 that the exchange is at least two years away from breaking even in Europe, arguing that the Markets in Crypto-Assets regulation (MiCA) alone will not deliver profitability. The remark is notable because MiCA, finalised by EU legislators in 2023, was widely billed as the single regulatory framework that would enable digital-asset firms to scale across the 27-member bloc's roughly 450 million consumers. Zhou’s position reframes the conversation: compliance with MiCA may permit market access, but it does not substitute for the national licences or banking and payments rails that drive revenue and lower cost of capital. For institutional investors and corporate strategists, the distinction matters because it shifts the commercial focus from regulatory checklists to business-model architecture and jurisdictional licensing strategies.

Ben Zhou’s timeline—"at least two years"—implies a break-even horizon not earlier than Q2 2028 from the April 26, 2026 interview date (Coindesk, Apr 26, 2026). That projection raises immediate questions about the marginal economics of running order books, custody, and fiat rails in Europe compared with the U.S. or Southeast Asian markets, where bespoke licences and banking integrations can materially alter unit economics. Bybit, founded in March 2018, built global scale rapidly on derivatives and spot liquidity; translating that scale into sustainable European operations requires navigating fragmented national regimes in addition to MiCA. Investors evaluating exchange operators should therefore distinguish between compliance-readiness (MiCA) and the set of permissions and partnerships that underpin sustainable revenue generation.

Bybit’s public statements come against a backdrop of consolidation and regulatory recalibration across crypto markets. The broader industry has learned that market access alone—registration, disclosure and basic conduct requirements—does not automatically translate into the same margins achieved by incumbent financial firms. For corporate treasuries, fintech partners and institutional counterparties, the practical question is whether additional licences (for custody, e-money, payment services or broker-dealer-like permissions) materially change revenue per active user and customer acquisition costs. This is both a regulatory and commercial calculus that will determine which exchange models attract institutional capital over the next 24 months.

Context

MiCA’s passage in 2023 represented the EU’s attempt to create a single rulebook for crypto-asset issuers, service providers and certain stablecoins. The regulation established perimeter definitions, disclosure obligations and prudential requirements for asset-referenced tokens and e-money tokens. While MiCA addresses market conduct and certain prudential safeguards at the EU level, it purposely leaves elementsof national implementation and supervisor relationships to member states. That latitude means firms still must secure local approvals or partnerships to achieve integrated fiat on- and off-ramps, something Ben Zhou identified as a commercial necessity (Coindesk, Apr 26, 2026).

The EU’s single-market logic—one rulebook for a population of approximately 450 million—creates a compelling commercial narrative for firms that can leverage cross-border scale. However, the reality is more complex: banking relationships, anti-money laundering (AML) compliance, and payment-system integration remain heavily influenced by national authorities and correspondent banking relationships. For many exchanges, the cost of establishing pan-European payments infrastructure, including compliance staffing, deposit guarantees and capital buffers, is a multi-year investment that impacts near-term profitability. This gap between regulatory harmonisation and practical operating prerequisites is central to Zhou’s contention that MiCA is necessary but not sufficient.

Market participants have reacted by layering national strategies on top of MiCA compliance. Some firms are obtaining e-money or payment institution licences in specific member states to legalise euro-denominated customer funds and integrate with SEPA. Others are pursuing custodial authorisations and direct banking partnerships to reduce reliance on third-party rails. The interplay between EU-level registration and national licensing choices will shape competitive positioning: exchanges that secure low-cost euro liquidity and reliable custody at scale gain a meaningful unit-economics advantage.

Data Deep Dive

The headline data point from the Coindesk interview is explicit: "at least two years" to break-even in Europe (Ben Zhou, Coindesk, Apr 26, 2026). Projecting two years forward places the earliest feasible break-even around H2 2028, assuming no material change in markets or regulatory cost. Bybit’s corporate history—founded in March 2018—shows rapid growth in product scope and user acquisition, but conversion to profit in a new regulatory regime requires capital investment in licensing, compliance tech and local operations. That capex and opex profile delays margin recovery compared with markets where firms already possess comprehensive permissions.

A second data point is MiCA’s 2023 finalisation (EU legislative texts, 2023), which established baseline conditions for token issuers and crypto-asset service providers. Third, the EU’s market size—roughly 450 million consumers—provides theoretical addressable reach but not automatic monetisation. Fourth, the arithmetic embedded in Zhou’s statement is illustrative: each additional licence or bank integration can add months of upfront work and millions of euros in spend before it meaningfully improves operating margin. Collectively, these figures underline the delta between legal authorisation to operate and the commercial levers that convert activity into profit.

Comparatively, U.S.-listed exchanges such as Coinbase (COIN) have benefited from deeper domestic fiat rails and long-standing relationships with banks and broker-dealer networks that support custody and institutional custody products. That structural advantage has historically supported faster margin recovery once trading volume scaled. By contrast, European entrants face heterogeneous national supervisory approaches and third-party dependencies that add friction and cost. These comparative dynamics inform the strategic choices exchange operators must make when allocating capital between product development and licensing.

Sector Implications

Zhou’s comments refract across multiple industry layers. For exchange operators, the immediate implication is strategic prioritisation: pursue national licences and bank partnerships to reduce cost per transaction, or rely on cross-border MiCA registration and third-party services with thinner margins. For incumbents and new entrants, the choice determines customer economics and the pace of European market consolidation. Firms that can bundle custody, payments and market access under controlled risk frameworks will likely win the institutional wallet share.

For banks and payment institutions, the window created by MiCA plus continued national licensing needs represents a commercial opportunity. Banks that offer integrated custody, fiat settlement and compliance-as-a-service can charge for value-added services and capture revenue that otherwise would flow to exchanges. For fintech partners, the opportunity is to productise integration points—KYC/AML, fiat on-ramps, and reconciliation—to reduce the operational burden on exchanges seeking quicker paths to profitability.

For regulators and policymakers, Zhou’s observation is a signal that legislative design and market outcomes can diverge. If the EU’s policy objective was to create a thriving native crypto ecosystem, additional regulatory clarifications or harmonised supervisory standards for payments and custody could accelerate commercial viability. That debate is likely to intensify if major exchanges defer significant investment in Europe or repatriate liquidity to jurisdictions with clearer bank integration paths.

Risk Assessment

Business model risk is front and centre. Exchanges operating under a MiCA-only approach face execution risk in securing low-cost fiat rails, which in turn affects customer acquisition cost and lifetime value. Operational risk is also material: building compliant custody and payments infrastructure increases attack surface and operational complexity. From a capital perspective, prolonged pre-profit periods raise funding risk, particularly for private exchanges reliant on venture capital cycles rather than diversified public markets access.

Regulatory risk remains non-trivial despite MiCA’s harmonisation. National supervisors retain powers that can affect day-to-day operations—banking relationships, AML enforcement and consumer protections. These supervisory frictions can impose tail-cost scenarios that extend Zhou’s two-year timeline. Market risk also factors: crypto market volatility can compress volumes and trading margins, lengthening time-to-profit even if licensing hurdles are overcome.

Counterparty and systemic risk are relevant to institutional counterparties assessing which exchanges to use for custody or liquidity. The differential in licensing and bank partnership status creates asymmetries in credit and counterparty exposure. Institutions will need to price that risk into counterparty limits, potentially favouring operators with broader national authorisations and bank-grade custody solutions.

Fazen Markets Perspective

Fazen Markets sees Zhou’s statement not simply as a candid operational forecast but as a recalibration of investor expectations about the European market. The headline—"MiCA isn't enough"—is accurate but incomplete: MiCA created the legal spine; the commercial musculature still needs to be built. A contrarian inference is that the market may over-discount exchange operators that commit to selective national licencing early. Firms that double down and acquire e-money or payment institution licences in key member states could compress the break-even horizon materially below Zhou’s two-year floor by capturing fee pools otherwise reserved for banks and PSPs.

Another non-obvious point is strategic sequencing: firms that prioritise institutional custody and segregated bank accounts for institutional clients will likely see faster monetisation than those focused solely on retail order-flow. Institutional revenue streams—prime brokerage, custody fees, and OTC execution—tend to produce higher margins per client and are less sensitive to spot volatility than retail trading fees. Thus, the correct comparator for measuring break-even is not retail-first exchanges but the integrated institutional services stack.

Finally, investors should watch the interplay between licensing moves and partnership announcements. Signalling effects—announcing a bank or e-money partner—can materially change perceived counterparty risk and unlock institutional flow. Fazen Markets maintains a regulatory tracker for these developments: Fazen Markets regulatory tracker and a dedicated Europe crypto coverage hub for subscribers Fazen Markets Europe crypto coverage.

FAQ

Q: Does MiCA allow exchanges to accept euro deposits immediately? A: MiCA provides a harmonised framework for offering services across the EU, but it does not automatically grant the banking or e-money licences required to hold client fiat deposits under local deposit frameworks. In practice, exchanges often need e-money or payment institution licences and bank partnerships to hold and move euros on behalf of clients.

Q: Could Bybit shorten the two-year timeline? A: Yes, under specific conditions. If Bybit secures multiple national licences and direct access to euro liquidity providers, or if it partners with an incumbent bank that absorbs settlement and custody operations, the unit economics could improve faster. However, those moves require regulatory approvals and operational integration that typically take months to execute.

Q: What does this mean for listed peers like Coinbase (COIN) or funds such as GBTC? A: Public peers that already enjoy robust custody and banking relationships may be relatively advantaged in serving institutional clients. That structural edge influences comparative valuation metrics and counterparty selection in Europe. Investors should track licence announcements and bank partnerships as forward indicators of competitive positioning.

Bottom Line

Ben Zhou’s assessment that MiCA alone will not produce near-term profitability reframes the European crypto market as one where licences and banking integrations—not simply regulatory registration—determine commercial success. Investors should prioritise operators with concrete national licences and bank partnerships when assessing European exposure.

Disclaimer: This article is for informational purposes only and does not constitute investment advice.