Bitcoin prices soared to an unprecedented high of over $72,000 on Monday, propelled by the announcement from the British financial watchdog allowing exchanges to list cryptocurrency-linked exchange-traded products (ETPs) for the first time.
In a notice issued on Monday, the Financial Conduct Authority (FCA) stated that it would not object to recognized investment exchanges’ requests to establish a dedicated U.K.-listed market segment for crypto-backed exchange-traded notes (ETNs). Exchanges are required to implement robust controls for orderly trading and ensure proper protection for professional investors, meeting all the criteria of the U.K.’s listings regime, including prospectus issuance and ongoing disclosures.
Bitcoin experienced a surge of over 3%, reaching $72,211.51 around 6:50 a.m. ET, marking a new all-time high. Although it retraced slightly, hovering below $71,530.13 as of 7:15 a.m. ET, the momentum remained strong. Ether also saw a gain of over 2%, reaching $4,041.23.
The London Stock Exchange acknowledged the FCA’s announcement, stating separately that it would begin accepting applications for the admission of bitcoin and ether ETNs starting the second quarter of this year.
The FCA clarified that only professional investors would be eligible to purchase ETNs, emphasizing the exclusion of retail investors due to perceived risks. The U.K. currently prohibits retail investors from acquiring crypto-linked ETNs or derivatives, citing potential hazards.
While allowing for crypto-linked bitcoin ETNs, the FCA maintains its stance on the unsuitability of crypto ETNs and derivatives for retail consumers, and the ban on their sale to this demographic remains in place. The FCA underscored the high-risk and largely unregulated nature of cryptoassets, advising investors to be prepared for potential losses.
This significant move by U.K. regulators follows the approval of the first-ever spot bitcoin exchange-traded funds (ETFs) by their U.S. counterparts. The Securities and Exchange Commission’s approval of ETFs from major firms like BlackRock, Fidelity, and Grayscale has already made them live and actively traded.
Bitcoin enthusiasts anticipate increased institutional investment and positive impacts on prices as more serious money enters the crypto market. The FCA’s decision to embrace crypto-linked bitcoin ETNs represents a shift from its 2020 ban on the sale of such products to consumers, citing extreme price volatility and financial crime concerns.
