11.38am: UK regulators snub crypto retail investors
Bitcoin ETFs may be changing the landscape of bitcoin in investing in the US, but UK regulators made their own moves this week by approving crypto-linked exchange-traded notes, or ETNs,for the first time.
Though ETNs come under the same category of exchange-traded products (ETNs) as ETFs, they are fundamentally different.
ETNs are derivative products, meaning they don’t hold bitcoin directly, while ETFs do. This means ETFs have considerably more influence over market prices, since they create buying (and selling) pressure on the underlying asset.
Tim Bevan is the chief executive of ETC Group, a leading provider of crypto asset ETPs in Europe, with Bitcoin and Ethereum ETPs listed in Germany and France.
He commented: “Whilst we welcome the FCA allowing LSE to set up a new segment for crypto ETPs, it is disappointing that retail investors are still precluded from participation in securities traded on regulated markets issued through an authorised prospectus when no such restriction applies to opening a direct crypto account.
"If UK regulations permitted retail investors to invest in crypto ETPs, via regulated markets, this would bring the UK in line with much of Europe and allow those retail investors to take advantage of the built-in security that established exchanges provide. It would also help advance the claim of the UK to be a global leader in fintech."
At the time of writing, bitcoin was skirting record highs at $72,200. It achieved an all-time high of $72,800 yesterday.
7.22am: Bitcoin sticks above $72,000
Bitcoin remained in all-time high territory on Tuesday morning, after surpassing the US$72,000 mark for the first time ever earlier in the week.
At US$72,075, the cryptocurrency had receded from the record US$72,480 mark, holding firm ahead of key consumer price index inflation data from the US later on Tuesday.
“The massive inflows that have been allowed by the introduction of spot exchange-traded funds (ETFs) and the upcoming halving are fueling the actual rally in bitcoin,” Swissquote Bank analyst Ipek Ozkardeskaya commented.
“The bulls are eyeing the US$100,000 mark, I believe we will get there.”
Such ETFs were approved by the Securities and Exchange Commission (SEC) in mid-January and now command over US$56 billion of all bitcoin in circulation, as per Bloomberg.
April’s halving will see the rewards for mining the digital tokens cut in half meanwhile, in the latest bid to limit supply.
“There are signs that a small allocation to alternative asset classes like bitcoin are worthwhile for longer-term investors and institutional investors,” XTB’s Kathleen Brooks added.
“[These] factors, along with a supportive macro backdrop, relatively strong market sentiment and the prospect of interest rate cuts from the Fed are also helping to propel bitcoin higher."