Bitcoin (BTC) tops $71,000 as UK FCA opens door to crypto ETN

Chesnot | Getty Images News | Getty Images

Bitcoin prices rebounded on Monday to hit a record high of over $71,000 after Britain’s financial watchdog announced it would allow exchanges to list crypto-linked exchange traded products for the first time. .

The Financial Conduct Authority said in a notice on Monday that it would not oppose a request from a recognized investment exchange to create a UK listed market segment for crypto-backed exchange-traded funds (ETNs).

Exchanges need to ensure that sufficient controls are in place to ensure that trading occurs in an orderly manner and that professional investors are afforded adequate protection. All requirements for the UK listing regime, prospectus publication and continuous disclosure must be met.

Bitcoin prices rose more than 3% to $71,726.49 around 4:30 a.m. ET, hitting a new all-time high. Ether rose nearly 2% to $4,014.90.

The London Stock Exchange confirmed the FCA’s statement on Monday and said in a separate statement that it will accept applications for entry for Bitcoin and Ether ETNs from the second quarter of this year.

The FCA has clarified that only professional investors can purchase ETNs. The UK currently does not allow retail investors to buy ETNs or derivatives linked to cryptocurrencies, saying the risks are too high for consumers.

The FCA said it continues to believe that cETNs (cryptocurrency ETNs) and crypto derivatives are “unsuitable for retail consumers because they cause harm”.

“As a result, the ban on the sale of cETNs (and virtual currency derivatives) to retail consumers remains in place.”

The FCA added: “We continue to remind people that crypto assets are high risk and largely unregulated. Investors should be prepared to lose all their money.”

Why this is a big step for cryptocurrencies

The UK regulator’s move comes after US regulators approved the first-ever spot Bitcoin exchange-traded fund.

The Securities and Exchange Commission has given the green light to ETFs from BlackRock, Fidelity, Grayscale, and other major companies that are now operational and trading.

Unlike ETFs, which are funds that hold assets, ETNs are unsecured debt securities issued by banks. Usually linked to a market index or other benchmark. The ETN promises to pay the full amount of the index less management fees at maturity.

Bitcoin bulls point out that this will lead to increased institutional investment in Bitcoin and other cryptocurrencies. They argue that this will have a positive impact on prices as more serious funds will flow into the market.

The FCA has decided to allow Bitcoin ETNs linked to cryptocurrencies following backlash from regulators. In 2020, the FCA banned the sale of ETNs and derivatives linked to cryptocurrencies to consumers, saying they were unsuitable for everyday investors.

At the time, the FCA cited extreme price fluctuations in cryptocurrencies and financial crime in the secondary market as contributing factors, adding that consumers “could be harmed by sudden and unexpected losses.”

Summarize this content to 100 words Chesnot | Getty Images News | Getty ImagesBitcoin prices rebounded on Monday to hit a record high of over $71,000 after Britain’s financial watchdog announced it would allow exchanges to list crypto-linked exchange traded products for the first time. .The Financial Conduct Authority said in a notice on Monday that it would not oppose a request from a recognized investment exchange to create a UK listed market segment for crypto-backed exchange-traded funds (ETNs).Exchanges need to ensure that sufficient controls are in place to ensure that trading occurs in an orderly manner and that professional investors are afforded adequate protection. All requirements for the UK listing regime, prospectus publication and continuous disclosure must be met.Bitcoin prices rose more than 3% to $71,726.49 around 4:30 a.m. ET, hitting a new all-time high. Ether rose nearly 2% to $4,014.90.The London Stock Exchange confirmed the FCA’s statement on Monday and said in a separate statement that it will accept applications for entry for Bitcoin and Ether ETNs from the second quarter of this year.The FCA has clarified that only professional investors can purchase ETNs. The UK currently does not allow retail investors to buy ETNs or derivatives linked to cryptocurrencies, saying the risks are too high for consumers.The FCA said it continues to believe that cETNs (cryptocurrency ETNs) and crypto derivatives are “unsuitable for retail consumers because they cause harm”.“As a result, the ban on the sale of cETNs (and virtual currency derivatives) to retail consumers remains in place.”The FCA added: “We continue to remind people that crypto assets are high risk and largely unregulated. Investors should be prepared to lose all their money.”Why this is a big step for cryptocurrenciesThe UK regulator’s move comes after US regulators approved the first-ever spot Bitcoin exchange-traded fund.The Securities and Exchange Commission has given the green light to ETFs from BlackRock, Fidelity, Grayscale, and other major companies that are now operational and trading.Unlike ETFs, which are funds that hold assets, ETNs are unsecured debt securities issued by banks. Usually linked to a market index or other benchmark. The ETN promises to pay the full amount of the index less management fees at maturity.Bitcoin bulls point out that this will lead to increased institutional investment in Bitcoin and other cryptocurrencies. They argue that this will have a positive impact on prices as more serious funds will flow into the market.The FCA has decided to allow Bitcoin ETNs linked to cryptocurrencies following backlash from regulators. In 2020, the FCA banned the sale of ETNs and derivatives linked to cryptocurrencies to consumers, saying they were unsuitable for everyday investors.At the time, the FCA cited extreme price fluctuations in cryptocurrencies and financial crime in the secondary market as contributing factors, adding that consumers “could be harmed by sudden and unexpected losses.”
https://www.cnbc.com/2024/03/11/bitcoin-btc-tops-71000-as-uk-fca-opens-door-to-crypto-etns.html Bitcoin (BTC) tops $71,000 as UK FCA opens door to crypto ETN

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