European banks are gearing up for a significant rebound in interest income, with figures potentially reaching around €30 billion. This development marks a turning point for the banking sector after years of squeezed margins.

What's driving this? Higher interest rate environments have extended their runway longer than initially expected. When central banks keep rates elevated, traditional banks collect wider spreads between what they pay depositors and what they charge borrowers. That's the basic playbook—and it's working.

For the crypto ecosystem, this matters more than you'd think. When traditional banking becomes more profitable again, institutional capital flow patterns shift. Some funds redirect capital from alternative investments back into conventional financial products. Others diversify across both sectors. Either way, macro tailwinds or headwinds in traditional finance ripple through digital asset markets.

The €30 billion rebound signals that the interest rate cycle isn't pivoting as aggressively as some feared. Sticky inflation and resilient economic activity keep the pressure on rates. For banks, that's good news. For borrowers and savers? It's more complicated.