What are the implications of high long liquidation rates for crypto banking in Europe?
High long liquidation rates in cryptocurrency markets, especially seen during 2025, carry substantial implications for the future of crypto banking in Europe. The dramatic increase in liquidations, particularly due to the October and November crashes, reveals systemic vulnerabilities connected with excessive leverage. Consequently, European Union regulatory bodies are poised to respond with more stringent regulations under the Markets in Crypto-Assets (MiCA) framework. This response might incorporate leverage ceilings and fortified risk management protocols for crypto banking enterprises.
The European Systemic Risk Board (ESRB) has already pointed out concerns regarding the concentration of custodians and the dangers posed by…
