UK’s crypto ETF greenlight sparks bitcoin surge to record $72,000

FCA said that it will continue to believe cETNs (crypto ETNs) and crypto derivatives are “ill-suited for retail consumers due to the harm they pose.

Bitcoin soared to a record high above $72,000 on Monday following the announcement by the British financial watchdog, the Financial Conduct Authority (FCA), that it would permit exchanges to list cryptocurrency-linked exchange-traded products (ETPs) in the UK for the first time.

The UK’s Financial Conduct Authority (FCA) has stated in a notice that it will support recognized investment exchanges in creating a market segment for crypto-backed exchange-traded notes (ETNs).

However, these exchanges must put in place sufficient controls to maintain orderly trading and safeguard professional investors. In addition, compliance to the UK’s listings regime, which includes issuing prospectuses and providing ongoing disclosures, is obligatory.

At around 6:50 a.m. ET, the digital currency surged over 3% to a peak of $72,211.51, setting a new all-time high, before slightly retreating to below $71,530.13 by 7:15 a.m. ET.

Similarly, Ether experienced a rise of more than 2%, reaching $4,041.23.

The London Stock Exchange immediately acknowledged the FCA’s statement and confirmed it would consider applications for the admission of bitcoin and ether ETNs starting from the second quarter of the year.

However, the FCA specified that only professional investors would be eligible to purchase ETNs, reiterating its stance on the unsuitability of crypto-linked ETNs and derivatives for retail consumers due to their high-risk nature.

In the UK, retail investors are presently not allowed to purchase crypto-linked ETNs or derivatives due to concerns about their high risk levels for consumers.

Indicating towards the risks associated with crypto assets, FCA cautioned investors to be prepared for the possibility of losing all their invested funds. It reiterated its existing ban on the sale of crypto ETNs and derivatives to retail consumers.

The UK’s financial regulatory body said that it will continue to believe cETNs (crypto ETNs) and crypto derivatives are “ill-suited for retail consumers due to the harm they pose.