AAVE -13.95% in 7 Days as Euro Stablecoin Regulatory Approval Drives Strategic Shift

On NOV 15 2025, AAVE rose by 0.15% within 24 hours to reach $178.97, AAVE dropped by 13.95% within 7 days, dropped by 21.76% within 1 month, and dropped by 42.12% within 1 year.

Aave has become the first decentralized finance (DeFi) protocol to gain full regulatory approval under the European Union’s Markets in Crypto-Assets (MiCA) framework. This regulatory green light, granted to Aave’s Irish subsidiary Push Virtual Assets Ireland Limited by the Central Bank of Ireland, permits the DeFi platform to issue and operate euro-based stablecoins across all 27 European Economic Area (EEA) states. The approval marks a pivotal moment for legal DeFi infrastructure in Europe.

Euro stablecoins, now fully compliant with MiCA, can now be used in a controlled and transparent manner, addressing concerns by the European Central Bank (ECB) about the dominance of U.S.-dollar stablecoins such as USDT and USDC. Aave’s regulated offering is seen as a strategic alternative that reinforces financial sovereignty and reduces dependency on centralized systems.

The platform has launched a new fiat-to-crypto service called Push, which enables users to convert euros into stablecoins instantaneously with no fees. This contrasts sharply with the typical 1–3% conversion costs on most centralized exchanges. The zero-fee model has already drawn significant user interest, with Aave reporting a 24-hour trading volume of $542 million following the announcement.

Additionally, the platform now holds $22.8 billion in borrowed assets, demonstrating strong user trust in its infrastructure. Analysts suggest that this regulatory and operational milestone will catalyze the adoption of euro-denominated DeFi solutions, positioning Aave as a leader in compliant digital finance across the continent.

The MiCA approval also reinforces Ireland’s growing role as a regulatory hub for DeFi. Earlier this year, Kraken secured similar regulatory clearance in the country, signaling a broader trend of DeFi protocols seeking compliance in jurisdictions with evolving crypto frameworks. This shift could intensify competition among European regulators to attract crypto businesses, further legitimizing the DeFi ecosystem.

Backtest Hypothesis

A potential trading strategy that has been examined involves purchasing AAVE when it surges by 15% and holding it for one day. However, this approach has shown poor performance, with a 30-day percentage change of -12.96%, significantly underperforming broader market benchmarks. While the strategy attempts to capitalize on short-term momentum, it lacks consideration for broader market dynamics and volatility, leading to suboptimal results. This highlights the limitations of short-term speculative tactics in a highly volatile and interconnected market. Investors and analysts may need to focus on longer-term horizons and incorporate market sentiment and fundamental developments into their strategies to avoid such underperformance.