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Cryptocurrency in Europe: what does the future hold?

Luno Team
4 minute read

We reached out to our customers and stakeholders across Europe to get a holistic overview of the buoyant cryptocurrency economy emerging on the Continent.

European Bitcoin Report

The local financial services and regulatory landscape differ significantly by country. Rather than seeing cryptocurrencies as a threat, governments and regulators in Switzerland and Malta are embracing them as a route to growth, determined to lead the way in the tech world.

On the contrary, the governing bodies in Poland and Slovakia have been less welcoming to cryptocurrency newcomers disrupting the status quo of the domestic financial services industry. Germany is set to regulate virtual currencies like other financial instruments to establish a level playing field for Bitcoin challengers and the traditional institutions alike. Overall, thriving cryptocurrency communities are growing rapidly and driving discussions with regulators all across the board.

For a country by country snapshot, read the European Bitcoin Report commissioned by Luno.

Below is a snapshot of the prominent trends and insights on the state of play.

Mars and Venus

According to CoinDance, 91% of Bitcoin buyers worldwide identify as male. Almost all - 87% - are under the age of 45. Predictably, nearly half of people who buy Bitcoin are between 24 and 34 -a demographic renowned for being technology early adopters. Our survey revealed that over 25% of our customers are female and most are aged between 25 and 30.

Keeping tabs

Over 90% of Luno customers check the Bitcoin price at least once a week, with over ⅔ checking it at least once a day, and 42.5% checking multiple times a day. The frequency is on par with those who regard Bitcoin as an investment. This is more often than most people check their bank balance or even their investment portfolios, showing that cryptocurrencies are becoming a part of our everyday lives.

Great expectations

Almost a third of Luno customers expect Bitcoin prices to reach the same range as 2017 ($10,000-$20,000), 21% expect the price trajectory to continue, reaching the $20,000-30,000 bracket. Furthermore, 13.4% of customers expect the Bitcoin price to stretch to the $30,000-$50,000 range, and nearly 10% predict an increase of over $100,000.

Asset vs payment method

Almost 60% of Luno customers consider Bitcoin as an asset rather than a payment method. Of the remaining 40%, half chose Bitcoin for the control it gives them over their finances and over 12% favour it as a payment method, the remainder chose Bitcoin for the speed of transactions.

We believe that the use of Bitcoin as a payment mechanism will rise in the future. For merchants, Bitcoin is cheaper than local currencies as the processing and chargeback costs are lower or non-existent. In fact, many retailers offer discounts to incentivise Bitcoin transactions.

Altcoin bonanza

Around ⅔ of Luno customers use other exchange platforms for buying and selling Bitcoin. Almost 80% of them have purchased another cryptocurrency in addition to Bitcoin, with Ethereum and Litecoin being prevalent choices. Despite thousands of altcoins on offer, Bitcoin remains the market leader with 44% of our survey respondents favouring it over other cryptocurrencies.

Europe: the crypto barometer

Our survey findings demonstrate that the European cryptocurrency community is coming of age and that the existing infrastructure offers robust mass-market opportunities. We looked at some further key metrics for 13 European countries.

  • On average, 84% of people have internet access
  • Up to 93% of people over the age of 15 have a bank account
  • The average nation has 318 Bitcoin mining nodes

Bitcoin capital of Europe

We evaluated the 13 European countries in our report according to their rankings for the following criteria: internet access, financial inclusion, Bitcoin mining activity and general cryptocurrency adoption. As a result, the Netherlands emerged as the Bitcoin capital of Europe. Norway and Germany are tied in the second place, with the UK and Sweden jointly coming third.

European countries ranked according to their Bitcoin market penetration

Country Rank
Netherlands 1
Germany, Norway 2
UK, Sweden 3
Ireland 4
Denmark 5
Belgium 6
France 7
Spain 8
Italy 9
Romania 10
Poland 11

The future's bright for Europe

As the birthplace of the film camera, the telephone, the world wide web, the print press, the first computer and programming language, the laptop, and the supercomputer, Europe has long been a hotbed of tech innovation.

Potential to lead the world in the crypto revolution

The majority of Europe has transitioned to the EUR not that long ago, so the idea of changing the entire payment system is not as alien as it might be for other parts of the world.

From Euro to Bitcoin

The Euro is in use by most European countries as well as other parts of the world. And with a high percentage of Europeans having either German or English as a common language, it is a highly interconnected continent that has long ago embraced the economic and social advantages of a single currency market. As European countries are progressively de-cashing, a move to a unified global digital financial system is not implausible.

Commitment to privacy and transparency

The European General Data Protection Regulation has paved the way for greater appreciation of the benefits a more secure, private financial system could bring. At Luno, we store funds using multi-signature security with independent third party security partners, making it impossible for a single individual to get access to those funds. Sensitive customer information is encrypted and customer passwords stored in hashed form so that nobody has access to customer passwords.

Liberté, égalité, fraternité

Historically, Europe has consistently opposed state-imposed censorship and championed the free speech. According to the Reporters Without Borders index, most of Europe ranks in the top 50 worldwide for freedom of press. The Economic Freedom Index also confirms its egalitarian credentials ranking Switzerland as the 4th in the world, Ireland as the 6th, with the UK firmly in the 8th place.

This resonates with the core premise of decentralised cryptocurrencies that can help upgrade the world to something better: money that is cheaper, faster and safer, transparent yet private, controllable and with open and equal access for everyone.

Events & education

Europe is home to numerous cryptocurrency communities, including meetup groups, forums, conferences and educational institutions. The strength of these communities is what’s driving the acceptance of cryptocurrencies by regulators and governments and its mainstream adoption. Below are some recommendations to help you hone your cryptocurrency knowledge.

Educational opportunities:

Popular meetup groups:

For a country by country snapshot, read the European Bitcoin Report commissioned by Luno.

Avatar Luno Team
Author

Luno Team

The Luno blog conveys the views of Luno and the people within our team. We will never provide financial or any other form of advice. We urge you to conduct your own research before purchasing or trading any cryptocurrencies. Always be aware of the sometimes volatile nature of the market, and never trade with funds that you cannot afford to lose.

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