Bitcoin once again hit a new record, surging to more than $72,000 Monday morning after the U.K.’s finance watchdog said it would allow investment exchanges to list crypto-linked exchange-traded notes (or ETNs).
The U.K. Financial Conduct Authority (FCA) said the products would only be available for professional investors, including investment firms and credit institutions that are allowed or regulated to operate in the financial market. It added that exchanges must have sufficient controls in place, “so trading is orderly and proper protection is afforded to professional investors.” The FCA also said a ban on retail investors from buying crypto-linked ETNs or derivatives remains in place because they are too risky.
After the U.S. Securities and Exchange Commission approved spot bitcoin ETFs in January, allowing investors to trade crypto with less risk, new investors have entered the crypto market — and the price of bitcoin has been on the rise. Last week, bitcoin briefly surpassed its previous record high from 2021 when it surged to $69,191.95. But ETFs are different from ETNs, as ETFs are a fund-holding asset, while an ETN is an unsecured debt note issued by a bank.
Bitcoin investors are also anticipating the currency’s “halving” event next month, which is expected to keep Bitcoin’s price surging over the next few months. The event happens every four years, and sees Bitcoin miners earning only half the reward for minting new Bitcoin. That means the reward will be cut from 6.25 Bitcoin to 3.125. The event, which was written into the cryptocurrency’s code to protect it from inflation, will continue until Bitcoin reaches a cap of 21 million. After every 210,000 blocks are added to the chain, the reward is cut in half to slow down the pace of adding new Bitcoin to circulation.