Chainalysis Report: Why Did Western Europe Withstand the Global Crypto Market Chill?

The UK contracts, the EU expands, and stablecoin and euro trading rise.

Written by: Chainalysis

Compiled by: Luffy, Foresight News

The data research organization Chainalysis has released its 2026 Global Crypto Adoption Report. The report's section on Western Europe mentions that despite the global crypto market entering 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 divergence: the UK market contracts; users in France turn to self-custodied stablecoins due to fiscal pressures; while exchanges in Spain attract a large influx of cross-border funds from Europe. The amount of stablecoins held in Western Europe has surged, and the euro's share in crypto trading has increased, indicating a shift from speculation to institutionalization. Below is the Chinese translation of the Western Europe section of the report:

As the global crypto market enters a downturn, Western Europe demonstrates strong resilience. During the statistical period (July 2025 - June 2026), the total scale of the crypto economy in Western Europe is $2.08 trillion, ranking second globally, with a slight growth of 1.2%. Only three regions worldwide—Sub-Saharan Africa, Latin America, and Western Europe—record 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 significant differences: the proliferation 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 European leading crypto infrastructure provider BS Digital, commented on this round of changes: "The pace of institutional adoption is accelerating, and crypto assets are gradually transitioning from a new speculative asset class to mainstream financial products."

However, the backdrop of all this is the uncertain overall economic outlook in Europe and the ongoing shifts 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 a long-established global financial center, with mature capital markets and banking, the UK crypto market resembles a natural extension of its domestic financial services. However, during the statistical period, the market size shrank by 8%, primarily due to a decrease in trading volume on decentralized exchanges (DEX).

Germany ranks second with $288.8 billion, and France is third with $215.8 billion. The German market has slightly contracted, also due to reduced DEX trading; the French market remains basically flat. Spain ($156.1 billion) and Switzerland ($132.8 billion) have seen 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.

Map of the Scale 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, head of global public affairs at decentralized credit infrastructure Morpho, stated: "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 support business development."

The Euro's Influence in the Crypto Market Strengthens

The rise of the euro's status is one of the hallmarks of the maturity of 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 statistics for crypto order books are based on unilateral trading pairs (euro against tokens), which differ from the bilateral statistics in foreign exchange; taking half of that gives a reference benchmark of 14.5%.

Chainalysis data indicates that the euro is increasingly becoming a conversion channel for ordinary people entering the crypto market. By the end of the statistical period, the euro accounted for 11.8% of crypto trading denominated in 33 mainstream fiat currencies globally, a significant increase compared to the past, approaching the benchmark share in the foreign exchange market.

Proportion of Euro-denominated Crypto Trading Volume to Total Crypto Trading Volume

This upward cycle coincides with the implementation of the EU's MiCA regulation. MiCA establishes a unified regulatory framework for all crypto asset issuers and service providers within the EU, reducing uncertainty for investors; service providers can conduct business in all EU countries once they obtain a license.

Although data cannot directly prove a causal relationship, the increase in the euro's trading share is likely benefiting from the market stability brought 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 most significant regulatory change impacting the European crypto industry is the full 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

Research has found that the weight of stablecoins in the digital asset allocation of Western European residents is increasing, with stablecoin balances in personal wallets across all surveyed countries rising.

This change is significant. After the proliferation of stablecoins, Europe must address a core question—how to integrate these digital dollars/euros into the existing financial system.

Growth Rate of Stablecoin Holdings in Personal Wallets in Western Europe

The total amount of stablecoins held in personal wallets in Western Europe has skyrocketed 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 savings and transfer tools; MiCA has established clear entry rules for euro stablecoin issuers, promoting the development of the euro stablecoin sector. The rapid proliferation 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 stablecoin reserve rule in MiCA: under the current rules, ordinary stablecoin issuers must hold at least 30% of reserves in European bank deposits, while large significant stablecoins must hold 60%. Central banks are concerned that in the event of large-scale redemptions, there could be a sudden outflow of bank deposits, triggering financial risks.

Traditional financial institutions are also entering the fray. Jan-Oliver Sell, CEO of the stablecoin project Qivalis, which is supported by the alliance and complies with MiCA regulations, mentioned that compliant euro stablecoins have already seen clear landing scenarios: as on-chain cash settlement tools for tokenized assets, supporting condition-based programmable payments like payment on delivery between enterprises.

A spokesperson for the Spanish multinational bank CaixaBank stated that entering this type of business is also Europe's hope 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 concern in the market regarding European public finances, with discussions about sovereign debt risks. Years of high debt, consecutive economic shocks, and sluggish economic growth have gradually exposed fiscal vulnerabilities. France is the focal point of the market, with high debt levels and political deadlock disturbing the bond market. In October 2026, the yield on France's 10-year government bonds surpassed 5.14%, reaching a 20-year high, reflecting investors' concerns about France's finances and political situation.

Based on weekly data from July 2025 to June 2026, Chainalysis compared the yields of high-rated eurozone government bonds and US Treasuries, as well as the trading conditions of Bitcoin and tokenized gold, and identified a clear pattern: when euro yields rise relative to US Treasuries, 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.

The Link Between Eurozone Value Storage Crypto Trading and the Yield Spread Between German and US Bonds

There is also a correlation in magnitude. When euro yields rise relative to US Treasuries by about 2 basis points, euro-denominated trading is approximately 7.5% higher than dollar-denominated trading; when yields rise by 7 basis points, it is about 12% higher; when euro yields decline, the scale of euro trading will be 8%-10% lower.

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, data can only show correlation and cannot prove direct causation.

Prediction Markets: European Users Bet on Geopolitical Events, Prefer Negative Outcomes

Prediction markets allow crypto assets to be used beyond mere speculation, enabling users to 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 regulations classify such event contracts as retail binary options, effectively banning prediction markets across the EU; the UK also has related bans, 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 (global average 49%). However, on average, the returns from negative positions were not as good as those from positive ones.

Western European funds generally bet on negative outcomes in the US-Iran situation

In US-Iran related prediction markets, Western European funds have incurred losses across all classified tracks

This indicates that prediction markets are not just used to anticipate the direction of events, but have also become a channel for users to express geopolitical views. However, there is a disconnect between capital flows and profit outcomes: everyone anticipates that something will happen, but it is difficult to make money based on this judgment.

UK Market Turns Down as EU Continues to Expand

In the past few years, the UK crypto market 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 alone growing by 2.2%.

This divergence raises two questions: Why did the UK grow so quickly before? Why is the EU now more resilient to downturns?

Since 2022, the growth rate of the UK 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, increasing compliance costs and creating regulatory uncertainty, which will suppress growth in the short term. By July 2026, when service providers complete the transition and obtain licenses, the benefits of MiCA will be released—licensed service providers will be able to operate directly in all EU countries without having to apply for licenses individually.

Thus, MiCA will first suppress and then boost the expansion of the EU market. This round of expansion is occurring during a bear market where the global crypto market value has halved.

The UK, however, lacks a unified regulatory framework to hedge against the downturn. The market cooling 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 Mainstay

The use of stablecoins in the UK is changing: the scale of stablecoin transfers from wallet to wallet within the UK has surged, and stablecoins are no longer just used for cross-border remittances; domestic demand for capital circulation is rapidly increasing.

The UK leads the expansion of domestic stablecoin scale in Western Europe

During the statistical period, the point-to-point transfer of stablecoins 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 the Western European region, with the total transaction amount accounting for 60% of domestic transfers in Western Europe.

The differences compared to other parts of Europe are striking. 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, each person can hold a maximum of £20,000, which will determine the role stablecoins play in residents' financial management. On-chain data has already shown trends: 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.

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 retail wallets in the UK converted at least 80% of their crypto assets into stablecoins; the previous year's ratio was 0.66%, the highest among the six major markets in Western Europe. The Netherlands was at 0.54%, Italy at 0.52%, Finland at 0.46%, Sweden at 0.38%, and Germany at 0.20%.

All six countries saw an increase in this ratio, with Italy and Germany showing even higher multiples of growth (Italy 2.5 times, Germany 2.3 times, UK 1.6 times), but the absolute leading advantage of the UK is widening.

Another key point: the peak of the currency exchange trend occurred between July and September 2025, earlier than Bitcoin's peak in October. This indicates that this is not merely a defensive operation in a bear market, but a long-term, gradual change in user habits. The team continues to track this group of wallets and has found that many users choose to continue holding stablecoins when the market declines.

Under Financial Pressure, French Users Turn 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 to cut spending and control deficits, leading to protests against austerity measures, and the budget bill has faced multiple hurdles, weakening market confidence in France's 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 to manage assets in large quantities: 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 have control over their assets.

In three years, France has risen from 10th to 1st place in Western Europe in terms of the proportion of stablecoin 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.

In 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 a total of 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.

The number of stablecoin wallets in France has tripled, with net inflows of stablecoins into exchanges for 11 out of 12 months

The pace of wallet growth is synchronized with pressure in the bond market. In mid-2025, the monthly growth rate was about 6%, and after the turmoil in the bond market in the fall, 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 in the statistics, so there is currently no visibility on further transmission effects.

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 significant.

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 Across Europe

The inflow of funds into Spanish crypto exchanges is no longer primarily from 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.

The sources of funds for Spanish exchanges show that foreign Western European users have surpassed local Spanish users

The growth of cross-border inflows is widespread: the number of countries that transferred over $1 million 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%, while Portugal's jumped from 36% to 751%.

Funds flowing from other European countries into Spanish exchanges grew by 79.1%, while the overall growth rate of the Spanish crypto economy was only 24.6%. From July 2023 to the present, Western European users have transferred a total of $984 million to Spanish exchanges, of which $521 million flowed in during this statistical period.

The inflow growth rate of funds into Spanish exchanges has nearly doubled, from 100% to 198%

Gabriel Ayala, the API and Banking Operations Director of Spain's leading exchange Bit2Me, explains the reasons behind this: some neighboring countries lack major local platforms. "The Portuguese market size and language characteristics make it difficult to develop a large-scale local platform; Italy's complex regulations and fragmented market hinder the formation of large local exchanges."

Spanish platforms are seizing this opportunity, leveraging 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 proliferation of stablecoins, the cooling of DEX trading in some markets, and exchanges attracting users across borders are reshaping the crypto market in Western Europe, influenced by user habits, capital 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 capital continues 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 crypto market and traditional banking systems will become core issues determining the long-term direction of the industry.