Bybit’s Strategic Move Toward MiFID II Licensing and Its Implications for European Crypto Derivatives Growth

Bybit EU Group’s formal application for a Markets in Financial Instruments Directive II (MiFID II) license through its Austrian entity, Bybit X GmbH, marks a pivotal step in its strategy to dominate the European crypto derivatives market. This move, announced in September 2025, aligns with the company’s broader regulatory-first approach and positions it to offer regulated futures and options products across the European Economic Area (EEA) [1]. If approved, the license will enable Bybit to operate as an investment firm under the Austrian Securities Supervision Act (WAG 2018), expanding its services beyond its MiCAR-compliant spot trading platform [2]. The CEO, Ben Zhou, has hinted that derivatives products could launch within six months of approval, underscoring the urgency of Bybit’s expansion [3].

Regulatory Compliance as a Catalyst for Institutional Adoption

The European crypto derivatives market is undergoing a transformation driven by regulatory clarity. MiFID II and the Markets in Crypto-Assets Regulation (MiCAR) are reshaping the landscape, creating a framework where institutional investors can engage with crypto assets confidently. MiFID II governs traditional financial instruments, while MiCAR provides a harmonized regime for crypto-asset service providers (CASPs), allowing them to operate across the EU with a single license [4]. This dual framework ensures that crypto derivatives—such as futures and options—are treated with the same rigor as traditional derivatives, fostering trust among institutional players.

Institutional adoption has already accelerated under this regulatory environment. For instance, Gemini’s launch of MiFID II-compliant perpetual derivatives for EU customers in 2025 saw 32% of institutional investors increase their crypto holdings post-MiCA compliance [5]. Similarly, Bybit’s MiCAR-compliant platform, launched in July 2025, has integrated features like spot margin trading and partnerships with Circle to promote USDC adoption, further solidifying its appeal to institutional clients [6]. These examples highlight how regulatory alignment is not just a compliance checkbox but a strategic enabler for market expansion.

Market Growth Projections and Strategic Implications

The European crypto derivatives market is projected to grow significantly under MiFID II and MiCAR. According to a case study by Gemini, the market could reach €1.8 trillion by 2026, expanding at a 15% annual rate [5]. This growth is fueled by institutional demand for sophisticated tools like leveraged perpetual contracts and tokenized assets, which are now accessible within a regulated framework. For example, Gemini’s tokenized stocks of companies like AMD and Reddit have attracted both institutional and retail investors, demonstrating the market’s potential for innovation [5].

Bybit’s pursuit of a MiFID II license is poised to amplify this trend. The company’s in-house TraFi trading platform, replacing MetaTrader 5, reflects its commitment to tailored solutions for institutional clients [7]. Once licensed, Bybit will join competitors like Kraken and Gemini in offering a full suite of regulated derivatives, intensifying competition and driving market maturation. This dynamic is critical for the EEA, where regulatory harmonization is expected to reduce cross-border friction and attract global capital [8].

Challenges and the Path Forward

Despite the optimism, challenges persist. Compliance costs have surged for European crypto firms, with licensing and operational expenses rising sixfold for some startups, leading to a decline in venture capital funding [5]. Additionally, the classification of crypto assets under MiFID II remains complex, requiring firms to navigate a “substance over form” approach to determine regulatory applicability [4]. For Bybit, this means ensuring its derivatives offerings meet MiFID II’s stringent requirements while maintaining MiCAR compliance for spot trading.

However, the long-term benefits of regulatory alignment outweigh these hurdles. As noted in the KPMG 2025 Financial Services Regulatory Priorities report, the EU’s focus on digital finance and competitiveness will likely support a structured, transparent environment for crypto derivatives [9]. Bybit’s proactive stance positions it to capitalize on this shift, leveraging its MiFID II license to solidify its leadership in the European market.

Conclusion

Bybit’s strategic push for MiFID II licensing exemplifies how regulatory compliance can catalyze institutional adoption and market expansion in European crypto derivatives. By aligning with MiFID II and MiCAR, the company is not only addressing the demands of institutional investors but also contributing to a more resilient and innovative financial ecosystem. As the EEA’s crypto derivatives market grows toward €1.8 trillion, Bybit’s success will hinge on its ability to balance regulatory rigor with product innovation—a challenge it appears well-equipped to meet.

Source:
[1] Bybit EU Group Sets Sights on MiFID II License to Unlock Derivatives Market Across Europe [https://chainwire.org/2025/09/05/bybit-eu-group-sets-sights-on-mifid-ii-license-to-unlock-derivatives-market-across-europe/]
[2] Bybit Applies for MiFID II License in Austria to Expand European Services [https://icoholder.com/en/news/bybit-applies-for-mifid-ii-license-in-austria-to-expand-european-services]
[3] Bybit Pursues MiFID License for EU Derivatives, Phases Out MT5 for In-House TraFi [https://www.financemagnates.com/cryptocurrency/bybit-pursues-mifid-license-for-eu-derivatives-phases-out-mt5-for-in-house-trafi/]
[4] MiCAR vs. MiFID II: A Comprehensive Guide to EU Crypto Regulations [https://www.merklescience.com/blog/micar-vs-mifid-ii-a-comprehensive-guide-to-eu-crypto-regulations]
[5] Gemini's Strategic Expansion in Europe: A Catalyst for Institutional and Retail Crypto Adoption [https://www.ainvest.com/news/gemini-strategic-expansion-europe-catalyst-institutional-retail-crypto-adoption-2509/]
[6] Bybit EU Group Sets Sights on MiFID II License to Unlock Derivatives Market Across Europe [https://www.newswire.ca/news-releases/bybit-eu-group-sets-sights-on-mifid-ii-license-to-unlock-derivatives-market-across-europe-803809843.html]
[7] Bybit Pursues MiFID License for EU Derivatives, Phases Out MT5 for In-House TraFi [https://www.financemagnates.com/cryptocurrency/bybit-pursues-mifid-license-for-eu-derivatives-phases-out-mt5-for-in-house-trafi/]
[8] An Overview of the European Markets in Crypto-Assets Regulation [https://www.americanbar.org/groups/international_law/resources/international-lawyer/58-1/overview-european-markets-crypto-assets-regulation/]
[9] 2025 Financial Services Regulatory Priorities [https://kpmg.com/xx/en/our-insights/regulatory-insights/2025-financial-services-regulatory-priorities.html]