The European Securities and Markets Authority (ESMA) is the umbrella regulator for crypto-assets under the EU’s MiCA regulations. Yesterday it released an analysis of cryptocurrency market structures, secondary trading and their relevance for the EU. While it hasn’t happened yet, it cautiously expects that MiCAR might encourage crypto trading in the EU to increase “given the regulatory certainty and enhanced protection it will provide to firms and investors in the EU.”
The authors found extensive concentration in most aspects of the crypto world, including the assets themselves, stablecoins, fiat currencies, and exchanges. While most people with crypto knowledge are aware of this, the extent of the concentration is extreme.
On the asset front, Bitcoin, Ether and Tether accounted for 73% of market capitalization at the end of 2023 and 55% of trading volumes for the year. Expanding to the top ten assets, the figures are 86% in value and 64% for trading.
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