European Q3 Earnings Surge 5.7%, Driven by Crypto Market Boom and MiCA Regulations

Europe's third-quarter earnings for 2025 exceeded expectations, with the MSCI Europe Index delivering a 5.7% earnings-per-share growth, far surpassing the 0% forecast by Reuters and Bloomberg Intelligence. Nearly the entire reporting season is complete, with around half of companies beating forecasts, leading analysts to raise guidance amid low interest rates, cost efficiencies, and economic recovery. The Stoxx Europe 600 index has climbed 14% year-to-date, with banks leading at a 55% jump, while energy and auto sectors showed resilience.

The earnings outperformance is closely tied to a surge in the cryptocurrency market, fueled by the Markets in Crypto-Assets (MiCA) regulations enhancing transparency and adoption. BTC and ETH reached record highs, and euro-denominated stablecoins like EURC saw dramatic increases in usage. Exchanges such as Binance, Coinbase, Robinhood, and Bitstamp reported elevated trading volumes, with institutional participation deepening the market ecosystem. Jeremy Allaire, CEO of Circle, emphasized, "MiCA has created a clear path forward for euro stablecoins. The market is responding rapidly; we're seeing adoption at a scale not witnessed before in Europe."

Looking ahead, 2026 earnings are projected to grow by 11%, and 12% for 2027, comparable to S&P 500 forecasts. AI integration also played a role, with record mentions in earnings calls driving productivity gains across sectors like banking and consumer discretionary.