Technology
Monday, March 11th, 2024 3:33 pm EDT
Key Points
- Bitcoin prices surged to a new record high above $72,000 following an announcement from the British Financial Conduct Authority (FCA) permitting exchanges to list cryptocurrency-linked exchange-traded products (ETPs) for the first time.
- The FCA stated that it would not object to recognized investment exchanges creating a U.K.-listed market segment for crypto-backed exchange-traded notes (ETNs), provided they meet all regulatory requirements and ensure proper protection for professional investors.
- While Bitcoin and Ether saw price increases, the FCA clarified that only professional investors would be allowed to buy ETNs, as the U.K. maintains a ban on retail investors purchasing crypto-linked ETNs or derivatives due to perceived risks. The decision marks a significant development in the crypto market, especially following the approval of spot bitcoin exchange-traded funds by U.S. regulators, with Bitcoin proponents anticipating increased institutional investment.
Bitcoin soared to a new record high above $72,000 on Monday following an announcement from the British Financial Conduct Authority (FCA) permitting exchanges to list cryptocurrency-linked exchange-traded products (ETPs) for the first time. The FCA stated it wouldn’t oppose requests from recognized investment exchanges to establish a U.K.-listed market segment for crypto-backed exchange-traded notes (ETNs). Exchanges must ensure orderly trading and provide proper protection to professional investors, meeting all U.K. listing regime requirements, including prospectus issuance and ongoing disclosures. Bitcoin surged over 3% to $72,211.51 after the news, receding slightly later. Ether also climbed over 2% to $4,041.23. The London Stock Exchange confirmed it would accept applications for the admission of bitcoin and ether ETNs starting the second quarter. However, only professional investors would be allowed to purchase these ETNs, as the FCA maintains that crypto-linked ETNs and derivatives are too risky for retail consumers, keeping the ban on retail sales in place. The FCA emphasized the high risks associated with cryptoassets and urged investors to be prepared to lose all their money. This decision marks a significant step for the crypto market, following the approval of spot bitcoin exchange-traded funds by U.S. regulators. While ETFs hold assets, ETNs are unsecured debt securities issued by banks, typically linked to market indices or benchmarks. Bitcoin proponents anticipate increased institutional investment, leading to a positive impact on prices. Despite this move, the FCA had previously banned the sale of crypto-linked ETNs and derivatives to consumers in 2020, citing extreme price volatility and financial crime risks.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/03/11/bitcoin-btc-tops-71000-as-uk-fca-opens-door-to-crypto-etns.html
