Bitcoin hits record after decision by UK’s financial watchdog
THE price of Bitcoin has hit a fresh all-time high as Britain’s financial watchdog said it would allow cryptocurrency-linked exchange-traded products for professional investors.
Bitcoin, the world’s biggest cryptocurrency, surged past $71,000 (£55,272) to hit a record $71,830.99 on Monday, according to Binance market data.
The rally came as the Financial Conduct Authority (FCA) said it would “not object” to the creation of cryptoasset-backed exchangetraded notes for the first time, while financial markets also increased their bets on an interest rate cut in the US after data showing a rise in unemployment.
The FCA decision follows similar moves by regulators in other markets, with Bitcoin enjoying a rally in recent months after the US Securities and Exchange Commission (SEC) gave the green light to cryptocurrency being adopted into more mainstream investment products.
The SEC reluctantly approved trading of the first Bitcoin exchange-traded funds (ETFs) in early January.
But the FCA said while it would allow these products for professional investors, the ban remains in place for retail investors.
It said: “With increased insight and data due to a longer period of trading history, the FCA believes exchanges and professional investors should now be able to better establish whether cryptoasset-backed exchange-traded notes (cETNs) meet their risk appetite.
“The FCA continues to believe cETNs and crypto derivatives are ill-suited for retail consumers due to the harm they pose.”
It added: “The FCA continues to remind people that cryptoassets are high risk and largely unregulated. Those who invest should be prepared to lose all their money.”
The regulator stressed that exchanges would need to ensure they have sufficient controls in place, “so that trading is orderly and proper protection is afforded to professional investors”.
The SEC’s decision to allow crypto ETFs prompted a wave of investors pouring money into spot Bitcoin ETFs launched by major investment firms such as BlackRock and Fidelity. The FCA’s move to follow suit is set to spark a similar rush in the UK.