Chainalysis report: The global cryptocurrency market has cooled down, why has Western Europe held up?
*Original Title: [Western Europe's $2 Trillion Crypto Economy Holds Firm](https://www.chainalysis.com/blog/western-europe-crypto-adoption-2026/)*
*Original Author: Chainalysis*
*Original Compilation: Luffy, Foresight News*
The data research organization Chainalysis has released the 2026 Global Crypto Adoption Report. The report's section on Western Europe mentions that even as the global crypto market faces a downturn, the $2.08 trillion crypto economy in Western Europe remains resilient, achieving slight positive growth.
The internal landscape of the region shows significant differentiation: the UK market is contracting; in France, users are turning to self-custodied stablecoins due to financial pressures; while Spanish exchanges are attracting a large amount of cross-border funds from Europe. The holdings of stablecoins in the Western European market have surged significantly, the euro's share in crypto trading has increased, and the industry is transitioning from speculation to institutionalization. Below is the Chinese translation of the report's Western Europe section:
As the global crypto market enters a downturn, Western Europe demonstrates strong resilience. During the statistical period (from July 2025 to June 2026), the total size of the Western European crypto economy is $2.08 trillion, ranking second globally, with a slight growth of 1.2%. Globally, only sub-Saharan Africa, Latin America, and Western Europe recorded positive growth.
New regulatory policies, continuous institutional funding, and deeper integration with traditional finance are transforming the crypto market in this region. However, the development paths of different countries show clear differences: the popularity of stablecoins, the enhanced status of the euro in crypto trading, and the cross-regional development of exchanges have become common trends.
Christopher Beck, Co-CEO of leading European crypto infrastructure service provider BS Digital, commented on this round of changes: "The pace of institutional adoption is accelerating, and crypto assets are gradually transforming from a type of emerging speculative asset into mainstream financial products."
However, the backdrop of all this is the uncertain overall economic outlook in Europe and the ongoing shift in user preferences, which directly determine the flow of crypto funds and the market focus.
### Six Markets Support Two-Thirds of Western Europe's Crypto Economy
The UK remains the largest crypto market in Western Europe, with a scale of $424.5 billion, accounting for 20% of the total in Western Europe. As an established global financial center, the capital markets and banking sector are mature, making the UK crypto market more like a natural extension of the local financial services industry. However, during the statistical period, the market size declined by 8%, primarily due to a decrease in trading volume on decentralized exchanges (DEX).
Germany ranks second with $288.8 billion, while France comes in third with $215.8 billion. The German market has slightly contracted, also due to reduced DEX trading; the French market remained basically flat. Spain ($156.1 billion) and Switzerland ($132.8 billion) experienced growth, primarily driven by increased activity on centralized exchanges (CEX).
Along with the Netherlands ($207.8 billion), these six countries account for about two-thirds of the total crypto economy in Western Europe, indicating a high concentration of crypto business in leading countries.
*Image: Map of the Size of the Crypto Economy in Western Europe*
Industry experts interviewed generally believe that the European crypto industry has bid farewell to wild growth and entered a new stage of mature development. Faustine Fleuret, Global Head of Public Affairs at decentralized credit infrastructure Morpho, pointed out this change:
"We can clearly see a shift: people are no longer just experimenting with cryptocurrencies but are embedding blockchain into mainstream financial operations. Banks, asset management institutions, and fintech companies are gradually realizing that on-chain finance is not a parallel system competing with traditional finance, but a new underlying technology that can be built upon to create business."
### The Euro's Influence in the Crypto Market Strengthens
The rise of the euro's status is one of the signs of maturity in the Western European crypto market, consistent with its role in the traditional foreign exchange market.
Data from the Bank for International Settlements (BIS) shows that in April 2025, the euro participated in 28.9% of global foreign exchange transactions. The crypto order book statistics are based on unilateral trading pairs (euro to tokens), which differ from the bilateral statistics in foreign exchange, so half of that, or 14.5%, is taken as a reference benchmark.
Chainalysis data indicates that the euro is increasingly becoming the exchange channel for ordinary people entering the crypto market. By the end of the statistical period, in crypto transactions priced in 33 major fiat currencies globally, the euro's trading share reached 11.8%, a significant increase compared to the past, approaching the benchmark share in the foreign exchange market.
*Image: Proportion of Euro-Priced Crypto Trading Volume to Total Crypto Trading Volume*
This upward cycle coincides with the implementation of the EU MiCA regulation. MiCA establishes a unified regulatory framework for all crypto asset issuers and service providers within the EU, reducing investor uncertainty, allowing service providers to operate in all EU countries once they obtain a license.
Although the data cannot directly prove a causal relationship, the increase in the euro's trading share is likely benefiting from the market stability brought about by unified regulation and the overall expansion of the EU crypto market.
Laurynas Spangevičius, General Manager of Robinhood Europe, commented on the impact of MiCA: "The biggest regulatory change impacting the European crypto industry is the comprehensive implementation of MiCA. Regulatory uncertainty has been replaced by clear rules, giving long-term mainstream investors the confidence to enter the market."
### The Growth Rate of Stablecoin Holdings in Western Europe Far Exceeds Other Regions Globally
Research has found that the weight of stablecoins in the digital asset allocation of Western European residents is increasing, with all surveyed countries seeing an increase in the stablecoin balances of personal wallets.
This change is significant. After the popularity of stablecoins, Europe must address a core question: how should these digital dollars/euros be integrated into the existing financial system?
*Image: Growth Rate of Stablecoin Holdings in Personal Wallets in Western Europe*
The total holdings of stablecoins in personal wallets within Western Europe surged by 131%, far exceeding the global growth rate of 52%, with Austria and France showing the most significant increases. This wave of growth has raised Western Europe's share of global stablecoins from 3.4% to 5.1%.
Multiple factors are driving this: European citizens desire more diverse tools for saving and transferring money; MiCA has established clear entry rules for euro stablecoin issuers, promoting the development of the euro stablecoin sector. The rapid adoption of stablecoins in Europe and their potential impact on the financial system can no longer be ignored.
Related debates have already begun. In September 2026, the European Central Bank and the central banks of EU countries publicly opposed a reserve rule for stablecoins in MiCA: under the current rules, ordinary stablecoin issuers must hold at least 30% of reserves in deposits at European banks, while large important stablecoins must hold 60%. Central banks are concerned that a large-scale redemption run could lead to a sudden loss of bank deposits, triggering financial risks.
Traditional financial institutions are also getting involved. Jan-Oliver Sell, CEO of the stablecoin project Qivalis, which is supported by the alliance and complies with MiCA regulatory requirements, mentioned that compliant euro stablecoins have already found clear use cases: as on-chain cash settlement tools for tokenized assets and supporting conditionally programmable payments like payment on delivery between businesses.
A spokesperson for the Spanish multinational bank CaixaBank stated that entering this type of business is also a way for Europe to avoid complete reliance on dollar stablecoins in the stablecoin sector.
Overall, euro stablecoins are expected to become an important part of Europe's digital financial infrastructure, but regulators and banks are still weighing the risks they pose to financial stability and monetary sovereignty.
### Changes in Euro Bond Yields Affect EU Bitcoin and Tokenized Gold Trading
Research has also discovered a pattern: when eurozone government bond yields rise relative to US Treasury yields, the proportion of euro-denominated Bitcoin and tokenized gold trading also increases.
The backdrop of this phenomenon is the growing market concern over European public finances, sparking discussions about sovereign debt risks. Years of high debt, consecutive economic shocks, and sluggish economic growth have gradually exposed fiscal vulnerabilities.
France is the focus of the market, with high debt levels and political deadlock disrupting the bond market. In October 2026, the yield on France's 10-year government bonds surpassed 5.14%, reaching a 20-year high, reflecting investor concerns about France's fiscal situation and political landscape.
Based on weekly data from July 2025 to June 2026, Chainalysis compared high-rated eurozone government bond yields, US Treasury yields, and the trading conditions of Bitcoin and tokenized gold, revealing a clear pattern.
When euro yields rise relative to US Treasury yields, the proportion of euro-denominated Bitcoin and tokenized gold trading increases compared to dollar-denominated trading; when the yield spread narrows, the enthusiasm for euro trading declines.
*Image: The Relationship Between Value Storage Crypto Trading in the Eurozone and the Yield Spread of High-Rated Eurozone Government Bonds and US Treasuries*
There is also a correlation in magnitude. When euro yields rise about 2 basis points relative to US Treasuries, euro-denominated trading is about 7.5% higher than dollar-denominated trading; when it rises by 7 basis points, it is about 12% higher; when euro yields fall, the scale of euro trading decreases by 8% to 10%.
One interpretation is that when the fiscal outlook in the eurozone is questioned, traders tend to include Bitcoin and tokenized gold in their portfolios as alternative safe-haven assets. Subsequent data from France also indirectly confirms this trend; however, the data can only show correlation, not direct causation.
### Prediction Markets: European Users Bet on Geopolitical Events, Prefer Betting on Negative Outcomes
Prediction markets have allowed crypto assets to be used for more than just speculation; users can bet on geopolitical conflicts and economic outcomes. Chainalysis analyzed the trading behavior of European wallets in geopolitical event contracts.
This analysis was conducted before the European Securities and Markets Authority (ESMA) introduced new regulations in July 2026: the new rules classify such event contracts as retail binary options, effectively banning prediction markets across the EU; the UK also has related prohibitions, and the analysis has taken the continuously changing regulatory environment into account.
Data shows that during the statistical period, European wallets allocated 74% of funds to negative outcomes in US-Iran related binary prediction markets (the global average is 49%). However, on average, positions betting on negative outcomes yielded lower returns than those betting on positive outcomes.
*Image: Western European funds generally betting on the negative trend of the US-Iran situation*
*Image: In the US-Iran related prediction market, Western European funds have incurred losses across all categories*
This indicates that prediction markets are not only used to anticipate event trends but have also become a channel for users to express geopolitical views. However, the flow of funds and profit results are disconnected: everyone anticipates that something will happen, but it is difficult to make money based on this judgment.
### The UK market shifts from growth to decline, while the EU continues to expand
In recent years, the UK crypto market has led Western Europe in growth, but the situation has reversed. The UK remains the largest market in Western Europe, but its scale has declined by 8%; the rest of Western Europe has seen an overall growth of 3.8%, with the EU region growing by 2.2% when counted separately.
This divergence raises two questions: Why did the UK grow quickly before? Why is the EU more resilient now?
*Image: Since 2022, the growth rate of the UK's crypto economy has outpaced other regions in Western Europe*
The impact of MiCA is an important clue. MiCA will enter its initial implementation phase in December 2024, with increased compliance costs and regulatory uncertainty suppressing short-term growth. By July 2026, when service providers complete the transition and obtain licenses, the benefits of MiCA will be released, allowing licensed service providers to operate directly in all EU countries without applying for licenses one by one.
Thus, MiCA first suppresses and then boosts the expansion of the EU market. This round of expansion occurs during a bear market where the global crypto market value has halved.
The UK does not have this unified regulatory framework to hedge against the downturn. The cooling of the market is also related to the Financial Conduct Authority (FCA) in the UK implementing a crypto regulatory access channel in September, leading many participants to adopt a wait-and-see approach.
Of course, data cannot prove that this is entirely due to regulation; market factors are equally complex, and it is impossible to isolate the impact of MiCA, but the timing is highly coincidental.
### New changes in UK stablecoins: from cross-border tools to domestic transfer main force
The use of stablecoins in the UK is changing: the scale of stablecoin transfers from wallet to wallet within the UK has significantly increased, and stablecoins are no longer just used for cross-border remittances, with domestic capital circulation needs rising rapidly.
*Image: The UK leads the expansion of domestic stablecoin scale in Western Europe*
During the statistical period, peer-to-peer stablecoin transfers within the UK reached $2.09 billion, compared to only $109 million in the same period last year. The increase in domestic stablecoins in the UK accounted for 65.2% of the total increase in Western Europe, with the total transaction amount accounting for 60% of domestic transfers in Western Europe.
The differences compared to other parts of Europe are significant. The amount of domestic transfers in the UK is 1.32 times that of cross-border P2P and service provider transfers; in other regions of Western Europe, the scale of cross-border transactions is 4.38 times that of domestic transactions.
The UK regulatory authorities have also listed stablecoin payments as a key focus for 2026. In June 2026, the Bank of England will release a draft regulatory policy for systemic stablecoins, establishing rules for large-scale stablecoin payments.
The Bank of England has also set personal holding limits. For a single systemic pound stablecoin, individuals can hold a maximum of £20,000, which will determine the role of stablecoins in residents' financial management. On-chain data has already shown a trend: more and more ordinary users in the UK are treating stablecoins as a tool for storing funds, rather than just as a medium for transactions.
*Image: The proportion of UK retail wallets converting the majority of crypto assets into stablecoins is higher than in other major Western European markets*
During the statistical period, 1.03% of eligible UK retail wallets converted at least 80% of their crypto assets into stablecoins; the previous year's ratio was 0.66%, the highest among the six core markets in Western Europe. The Netherlands had 0.54%, Italy 0.52%, Finland 0.46%, Sweden 0.38%, and Germany 0.20%.
The ratio increased in all six countries, with Italy and Germany showing even higher multiples of growth (Italy 2.5 times, Germany 2.3 times, and the UK 1.6 times), but the absolute leading advantage of the UK is widening.
Another key point: the peak of the currency exchange wave occurred between July and September 2025, earlier than Bitcoin's peak in October. This indicates that this is not merely a risk-averse operation in a bear market, but a long-term, gradual change in user habits. The team continues to track this group of wallets and finds that when the market declines later, many users choose to continue holding stablecoins.
### Under financial pressure, French users flock to self-custodied stablecoins
France is the focal point of fiscal contradictions in Europe. High debt and a divided parliament make it difficult to advance policies for cutting spending and controlling deficits, leading to protests against austerity measures and multiple challenges to the budget bill, weakening market confidence in French public finances.
Against the backdrop of rising economic and political uncertainty, on-chain data has observed three clear signals: French users are beginning to use self-custodied stablecoins in large quantities to manage assets: the proportion of withdrawals from centralized exchanges has increased, the number of personal wallets holding stablecoins has grown, and the balances within wallets have continued to rise, indicating that users want to control their assets themselves.
Over three years, France has surged from 10th to 1st place in Western Europe in terms of stablecoin-related withdrawals from exchanges. During the statistical period, stablecoin withdrawals accounted for 54.2% of the total amount withdrawn by French users from exchanges, surpassing Germany. The total amount of funds transferred from exchanges to French wallets increased by 12%, while the average for the rest of Western Europe was only 7%, indicating more assets are being self-custodied on-chain.
*Image: Over three years, France's share of withdrawals from exchanges has risen from 10th to first in Western Europe*
The number of personal wallets holding stablecoins in France has continued to rise: from 3,577 in June 2025 to 12,255 in June 2026, a 3.4-fold increase; the average in other regions of Western Europe is only 1.7 times.
*Image: The number of stablecoin wallets in France has tripled, with stablecoin net inflows into exchanges for 11 out of 12 months*
The growth pace of wallets is synchronized with pressure in the bond market. By mid-2025, the monthly growth rate was about 6%, and after the turmoil in the bond market in autumn, the monthly growth rate surged to 18% by the end of the year; after market sentiment stabilized, it fell back to 5% by June 2026. This report's statistics end in June, and the new round of bond market shocks in October is not included, so no further effects can be seen for now.
The balance of self-custodied stablecoins held by French users surged by 192% during the statistical period; during the same period, bank deposits in France only grew by 2%. Although the volume of stablecoins remains small compared to traditional savings, the growth rate is very remarkable.
*Image: The balance of self-custodied stablecoins in France surged by 192%, while bank deposits only grew by 2%*
This series of trends represents French residents seeking alternative asset storage channels amid uncertainty, and does not mean that everyone has lost confidence in the euro; rather, it reflects a choice for diversified asset allocation.
### Spanish exchanges attract users from all over Europe
The inflow of funds into Spanish crypto exchanges is no longer dominated by domestic users; the scale of funds contributed by users from other European countries has surpassed that of local users, making Spain a hub for pan-European crypto trading.
Since 2024, both domestic and cross-border inflows into Spanish exchanges have been rising, but the growth rate of cross-border funds is significantly faster. During the statistical period, funds from other European countries flowing into Spanish exchanges exceeded those from local Spanish users.
*Image: The sources of funds for Spanish exchanges, with overseas Western European users surpassing local Spanish users*
The growth of cross-border inflows is widespread: the number of countries transferring over $100,000 to Spanish exchanges last year saw an average increase of 198% during the statistical period, compared to 100% the previous year; the median growth rate rose from 82% to 162%. Italy and Portugal are the largest source countries: Italy's fund growth surged from 22% to 329%, and Portugal's from 36% to 751%.
Funds flowing into Spanish exchanges from other European countries grew by 79.1%, while the overall growth rate of the Spanish crypto economy was only 24.6%. From July 2023 to now, Western European users have transferred a total of $984 million to Spanish exchanges, of which $521 million flowed in during this statistical period.
*Image: The inflow growth rate of funds into Spanish exchanges has nearly doubled, from 100% to 198%*
Gabriel Ayala, the API and banking business director of the leading Spanish exchange Bit2Me, explains the reasons behind this: some neighboring countries lack local leading platforms. "The size of the Portuguese market and its language characteristics make it difficult to develop a large-scale local platform; Italy's complex regulations and fragmented market make it hard to form a large local exchange."
The Spanish platform has seized this opportunity, leveraging its compliance capabilities and scale advantages to compete across Europe. The MiCA unified regulatory framework further lowers the operational threshold across the EU. The rise of Spanish exchanges is a microcosm of the integration of markets across Europe.
### A new chapter for the European crypto industry
The popularization of stablecoins, the cooling of DEX trading in some markets, and exchanges attracting users across countries are reshaping the Western European crypto market alongside user habits, funding preferences, and external macro factors. Robinhood's Spangevičius summarizes that the European crypto industry has transitioned from scattered speculation to structural maturity.
Financial risks, geopolitical events, and regulatory changes are altering global digital asset trading, with Europe being the clearest sample to observe these changes. Whether the industry can continue to move forward depends not only on whether institutional funds continue to enter but also on how practitioners adapt to the continuously changing financial environment and regulatory rules.
As institutional participation deepens, consumer protection, unified regulatory rules, and the linkage between the cryptocurrency market and the traditional banking system will become core issues determining the long-term direction of the industry.