MiCA: What changes will the new crypto regulation bring, and why over 70% of businesses will close next year

The cryptocurrency world is facing a real revolution—and not all companies will survive it. In December 2024, the new EU regulation MiCA (Markets in Crypto-Assets Regulation) will come into effect, and its consequences could be devastating for many crypto businesses. According to expert forecasts, more than 70% of companies dealing with crypto assets will be forced to close. Why will this regulation change the market so drastically, and what’s behind such a radical prediction?

What is MiCA and how will it change the crypto market?

MiCA is the first global regulation for crypto assets that establishes strict rules for all market participants: from stablecoin issuers to crypto exchanges and wallet providers. For the first time in the history of cryptocurrencies, clear legal frameworks will be introduced in Europe, regulating nearly every aspect of digital asset operations.

Key provisions of MiCA include:

• Licensing for all crypto companies: exchanges, service providers, and even crypto asset issuers will need to obtain licenses that comply with the EU's strict requirements.
• Strict rules for stablecoins: companies issuing stablecoins (such as USDT) must maintain full reserves and provide liquidity data.
• Investor protection: companies are required to disclose all risks associated with crypto assets and ensure protection against fraud.

Why will more than 70% of crypto businesses shut down?

This sounds alarming, but these changes leave little hope for many companies, especially small startups. Here are the main reasons:

• High licensing and capital requirements: to operate legally, every crypto company must go through licensing and maintain substantial capital reserves. Not everyone can meet these demands. Companies that fail to comply will have no choice but to leave the market.
• Lack of time to adapt: many companies simply won't have time to prepare for the new conditions. MiCA demands significant changes in operations, which cannot be accomplished in just a few months.
• Tightening control over stablecoins: issuers of stablecoins like Tether and Circle are facing tough times. Without full liquidity backing and compliance with new standards, they won’t be able to continue operating in the EU market. For example, Tether still lacks the necessary license, while Circle is already prepared for the new conditions.

What does this mean for the crypto undustry?

The closure of a significant portion of crypto companies could drastically shift the balance of power in the market. Many smaller exchanges and service providers simply won’t survive the pressure of new standards. Large players like Binance and Coinbase will manage to stay afloat thanks to their capital and resources, but the market will become much more centralized. This will lead to fewer choices for users, and competition in the market could decrease.

On the other hand, MiCA promises to create a more transparent and secure environment for investors. The new rules will help minimize risks for users, increase transaction safety, and reduce fraud.

What can businesses do to survive?

If your company works with crypto assets and plans to continue operating in the EU, you need to act now. Here are some steps to help you stay afloat:

• Obtain licenses and comply with the new requirements. Ensure that your company has all the necessary documents to operate under MiCA.
• Increase transparency. Business transparency and full data disclosure are core focuses of MiCA. Investors and regulators must have complete information about your operations.
• Monitor liquidity. If you issue stablecoins or other digital assets, be prepared to prove that you have full reserves to back your assets.

The future of the crypto market: the end or a new beginning?

Despite the alarming forecasts, MiCA could be a step forward for the entire cryptocurrency market. Clearer rules, licensing, and user protection will create trust in cryptocurrencies among traditional financial institutions and large investors. Regulation always meets resistance, but in the long run, it could open new opportunities for businesses.

Conclusion

The new MiCA regulation will radically reshape the cryptocurrency market, and those who are unprepared for these changes will be forced to exit. For those who can adapt, a new era is beginning—one that is more stable, transparent, and regulated. The choice is yours: either follow the new rules and survive, or become part of the 70% that will disappear next year.