Bybit CEO Ben Zhou believes that holding a Markets in Crypto Assets (MiCA) license is insufficient for cryptocurrency firms to achieve profitability within the European market, according to coindesk.com.
While a MiCA license allows for operations across the European Economic Area, Zhou noted that the framework lacks coverage for high-margin products like derivatives and tokenized assets. To offer these, companies must also secure MiFID II (Markets in Financial Instruments Directive) and Electronic Money Institution (EMI) authorizations.
“With the current MiCA framework, you can only do fiat-to-crypto, crypto-to-crypto," Zhou said in an interview with the outlet. “There are many elements of a profitable business you cannot do, so even as a MiCA holder — unless you're Kraken or Bitpanda or Bitvivo, who are already making money because they have multiple licenses.”
Even for Bybit, the world's second-largest exchange by trading volume, the path to profitability remains a long-term play. Zhou expects the company to reach a break-even point in Europe within two years, provided it acquires the necessary additional licenses.
“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. “It could be five years away, but I think that is a bit long. I would assume we are probably going to be profitable within two years."
Market consolidation looms
The industry faces a critical deadline as the MiCA grandfathering period ends on July 1. Firms must obtain MiCA authorization by this date to continue operating across the 27 EU member states, Norway, Iceland, and Liechtenstein.
This regulatory cutoff is expected to trigger significant market consolidation. Zhou noted that many small to medium-sized crypto companies may be forced to shut down because they cannot afford the necessary compliance infrastructure or the additional licenses required to generate revenue.
“There’s going to be market consolidation,” Zhou said. “That's why these guys are shutting down. Because even if they know they could afford MiCA, they're like, 'WTF, I need [MiFID, EMI] to make money, and I need to make a whole lot of investment in compliance infrastructure to be able to be profitable?’”
Regulatory oversight is also shifting toward more centralized control. The European Securities and Markets Authority (ESMA) has recently increased scrutiny, reminding firms that certain products, such as perpetual futures, may fall outside existing rules.
Regarding the potential for more centralized oversight from ESMA, Zhou maintained a neutral stance. He noted that while a level playing field is discussed, centralized regulation could increase bureaucracy.
“There are talks about a more level playing field... But there could be disadvantages. Because when you have a local regulator they are easy to get to. If we have any issues, we just send an email and go to FMA in Vienna. But if everyone's in Paris, then you have to line up. There are more CASPs, increased bureaucracy, decreased efficiency,” Zhou said.
Bybit has intentionally sought authorization from Austria’s FMA, a decision Zhou believes will provide long-term benefits despite the varying levels of strictness among different European regulators.
