Bitcoin
Bitcoin Hits Record High After Approval of Crypto Assets in UK
The cryptocurrency’s price surpassed $72,000 on Monday.
March 11, 2024, 11:13 am ET
• 5 minutes of reading
Bitcoin shot to a record high of more than $72,000 on Monday after a financial regulator in UK has given the green light to a cryptocurrency-backed investment vehicle.
Bitcoin hit $72,166 in early trading on Monday, just days after surpassing its previous high of nearly $69,000 in November 2021.
After surpassing this threshold last week, the price of bitcoin fell 10% before recovering to current levels.
The Financial Conduct Authority, the UK agency charged with regulating financial activity, he said it “will not oppose” exchanges forming a UK-listed market segment for Exchange Traded Notes, or cETNs, backed by crypto assets.
Bitcoin has risen in the last two monthsABC News, Yahoo Finance
Soon-to-be-available financial instruments allow traders to buy and sell assets whose price fluctuates with a given cryptocurrency.
Publicly listed assets allow traders to essentially invest in cryptocurrencies, but without the inconvenience and technical challenge of purchasing a cryptocurrency itself.
Despite approving cETNs, the Financial Conduct Authority said the products will remain unavailable to retail investors and warned traders about the risks associated with investing in cryptocurrencies.
“The FCA continues to remind people that crypto assets are high risk and largely unregulated. Those who invest must be prepared to lose all their money,” the agency said. he said in a statement.
The movement follows a similar path decision by the U.S. Securities and Exchange Commission in January, when the agency approved Bitcoin Exchange-Traded Funds, or Bitcoin ETFs.
Similarly, a Bitcoin ETF allows investors to purchase an asset that tracks Bitcoin’s price movement without pouring funds directly into the cryptocurrency.
Gary Gensler, chairman of the U.S. Securities and Exchange Commission (SEC), at SEC headquarters in Washington, D.C., January 9, 2024.TJ Kirkpatrick/Bloomberg via Getty Images, FILE
After the SEC approved Bitcoin ETFs, the price of Bitcoin soared, drawing fuel from an influx of new investments.
Shortly after the SEC approved the new investment option, a number of bitcoin ETFs became available, including offerings from traditional firms like Fidelity and Franklin Templeton.
New crypto alternatives have generated billions of dollars in investment within weeks, said Bryan Armour, director of passive strategies research at financial firm Morningstar, previously said ABC news. The top nine bitcoin ETFs received a combined total of $10 billion in the first seven weeks, Armor said.
Since bitcoin ETFs were approved on January 10, the price of bitcoin has increased by 54%.
Despite the blistering pace of gains in recent weeks, bitcoin has a history of significant price volatility.
Immediately after the approval of the bitcoin ETF, for example, the price of bitcoin fell 15% before recovering. Over the past five years, bitcoin has plummeted more than 40% on four separate occasions, Armor previously told ABC News.
An ETF is equivalent to a pool of securities that gives investors a way to bet that the price of an underlying asset will rise without purchasing that asset.
For example, an ETF for gold allows individuals and institutions to bet money on the price movement of the precious metal rather than purchasing, transporting and storing the physical item.
A Bitcoin ETF, meanwhile, gives investors access to the cryptocurrency market without facing the technical impediments and fees associated with browsing a cryptocurrency exchange.