The rate of institutional adoption of Bitcoin within the European Union continues to lag behind, particularly as the United States advances with significant cryptocurrency regulations aimed at recognizing BTC as a national reserve asset.
Over three weeks have passed since President Donald Trump’s executive order on March 7, detailing plans to utilize cryptocurrency seized from criminal activities to establish a federal Bitcoin (BTC) reserve, yet European firms have remained largely unresponsive to this development.
This inertia may be attributed to the intricate regulatory landscape in Europe, as noted by Elisenda Fabrega, general counsel at Brickken, a European real-world asset (RWA) tokenization platform.
“The adoption of Bitcoin by European corporations is still quite limited,” Fabrega shared with Cointelegraph, further emphasizing:
“This reluctance signifies a more profound structural divide, built on regulatory issues, institutional signaling, and the maturity of the market. Europe has not yet reached a clear conclusion about Bitcoin as a reserve asset.”
Bitcoin’s economic model tends to favor early adopters, creating potential pressure for investment firms to explore exposure to BTC. The asset has outperformed most significant global assets since Trump’s election, despite experiencing a recent dip.
Asset performance following Trump’s election victory. Source: Thomas Fahrer
In the wake of Trump’s executive order, only a handful of European corporations have publicly declared Bitcoin holdings or provided crypto services. These include major French bank BNP Paribas, Swiss firm 21Shares AG, VanEck Europe, Malta’s Jacobi Asset Management, and Austrian fintech company Bitpanda.
A recent survey by Bitpanda indicates that European financial institutions may be significantly underestimating demand from crypto investors by as much as 30%.
Related: Friday’s inflation report in the US might trigger a Bitcoin rally in April
The “fragmented” regulatory framework of Europe is ambiguous
The EU’s slower pace of adoption appears linked to its mosaic of regulations combined with more conservative investment strategies, according to analysts at Bitfinex, who informed Cointelegraph: “Europe’s institutional environment is distinctly more fragmented, with regulatory obstacles and cautious investment guidelines limiting the allocation to Bitcoin.”
“Furthermore, European pension funds and major asset managers have been slower to engage with Bitcoin exposure, often due to vague guidelines and risk aversion,” they elaborated.
Related: Bitcoin is ‘more likely’ to reach $110K before $76.5K — Arthur Hayes
In addition to the fragmented regulations, the appetite for retail investing and the participation of retail investors in Europe is generally less robust than in the US, asserts Iliya Kalchev, a dispatch analyst at digital asset investment platform Nexo.
Europe tends to be “overall more conservative in embracing new financial instruments,” Kalchev remarked to Cointelegraph, adding:
“This is in sharp contrast to the expansive, liquid, and relatively cohesive US capital market, where the rollout of spot Bitcoin ETFs was propelled by substantial retail demand and unequivocal regulatory support.”
iShares Bitcoin ETP listings. Source: BlackRock
On March 25, BlackRock, the largest asset manager globally, introduced a Bitcoin exchange-traded product (ETP) in Europe, an occurrence that could potentially enhance institutional confidence among European investors.
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