The numbers don't lie, folks. As a result, Donald Trump’s pro-crypto statements might be music to your ears. The data tells a very different story. Retail investors should vote with their feet, and they’re making a beeline for the regulatory sunlight of Europe.
Is US Regulatory Chaos Killing Crypto?
Paybis announces a record 70 % increase in trading volumes from EU clients right after MiCA’s entry into force in Q1 2025. Meanwhile, US activity on their platform? Down. Significantly. This isn’t just a blip. It’s a trend.
Think about it. You’re a mom-and-pop investor, just looking to sail through the US crypto regulation Wild West. You've got state-by-state licensing nightmares, the SEC breathing down everyone's neck with lawsuits, and constant delistings throwing a wrench in your plans. It's enough to give anyone a migraine.
Now, picture this: Europe.MiCA.European-level clear rules, European single licensing regime valid in all EU member states and effective investor protections that truly, you guessed it, protect you. Which market would you choose?
Retail's Exodus: Is This Bad News?
Some argue, "Who cares about retail? It's all about institutional investment now!" That's dangerously short-sighted. A healthy crypto ecosystem needs both. Retail investors are the lifeblood, the early adopters, the ones who inject innovation, excitement, who drive unsolicited adoption. Without them, you’re left with a hollow shell, a playground for the whales.
Kaiko's data is equally worrying. It’s why retail customers now make up just 18% of Coinbase’s spot trading volume, down a staggering 40 percentage points since 2021. Robinhood’s crypto trading volume was down 35% for Q1 2025. These aren't just numbers; they're alarm bells.
This isn't just about crypto. It's about trust. When retail investors are abandoning the market that’s a pretty clear indicator that something is terribly wrong. This reality reflects a deep lack of confidence in the regulatory environment. It makes us question the long-term sustainability and equity of our system as a whole. It's a canary in the coal mine.
Can GENIUS Act Rescue US Crypto?
The GENIUS Act might help. Adopting a unified licensing regime and clear definitions for dollar-backed stablecoins would be a good start. Is it enough? I’m not so sure.
MiCA goes beyond the issue of licensing, it’s about establishing a framework of trust. It's about creating an environment where innovation can thrive alongside investor protection. It’s about building confidence. The US requires more than playing catch-up—the US needs a fundamental rethinking of its approach.
Take France, for instance, where activity has increased 175%, largely attributed to its regulatory-forerunner approach. Germany is at the top when it comes to institutional infrastructure, and the Netherlands come in first for payment connectivity. Europe is not one crypto hub, but a web of interconnected and flourishing centers, adding together their different competitive advantages.
If we don’t act, the US is in danger of losing this competitive advantage. This threat isn’t coming because we lack innovation or talent, but because we have not created a regulatory environment that is clear and inviting. It’s time we stopped treating crypto as a threat and started treating it like the opportunity that it is. Otherwise, we’ll see the future of finance leave for good across the Atlantic.
Konstantins Vasilenko, co-founder of Paybis, is right. The US urgently needs to pull itself together. It’s more than just the billions big investment firms send in, it’s the little guys investors. And the few investors that do exist are departing.
| Metric | US Market | EU Market (Post-MiCA) |
|---|---|---|
| Trading Volume | Declining | Up 70% (Q1 2025) |
| Retail Participation | Decreasing (Coinbase: 18% of spot volume) | Increasing (Implied by volume and trade size) |
| Regulatory Clarity | Low; State-by-State, SEC Actions | High; Single EU Licensing Regime |
| Investor Confidence | Low | High |
The future of crypto isn’t so much about the technology, but rather, about trust, clarity, and fairness. At the moment, Europe is winning that battle. That’s a positive step that ought to set off alarm bells and fire up indignation from the US crypto community.
The future of crypto is not just about technology; it's about trust, clarity, and fairness. And right now, Europe is winning that battle. And that's something that should trigger both anxiety and outrage in the US crypto community.
