Bitcoin has soared to a new all-time high as the UK’s financial services regulator has confirmed it will allow cryptocurrency-linked exchange-traded products for professional investors.
The worlds’ most popular cryptocurrency rose past $71,000 (£55,272) to hit a record $71,830.99 earlier today.
This is a slight increase of three per cent in the past 24 hours, according to market data provided by Binance.
The Financial Conduct Authority (FCA) has confirmed it would “not object” to the launch of cryptoasset-backed exchange-traded notes for the first time.
This decision by the FCA comes following similar decisions by regulators in other major markets which have contributed to the recent rally in Bitcoin.
Notably, the US Securities and Exchange Commission (SEC) allowed cryptocurrency to be adopted into more mainstream investment products.
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Bitcoin is continuing to rally following recent decisions by regulators
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In January, the US’ financial services regulator approved trading of the first Bitcoin exchange-traded funds (ETFs).
While the FCA said it would allow these products to be accessible for professional investors, a ban for retail investors remains in place.
The regulator 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.
“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.”
As well as this, the FCA emphasised that exchanges must make sure they have sufficient controls in place to protect investors.
This is “so that trading is orderly and proper protection is afforded to professional investors”, according to the regulator.
Following the SEC’s decision to allow crypto ETFs, investors flooded money into spot Bitcoin ETFs which were launched by major investment firms such as Blackrock and Fidelity.
With the announcement of a similar move by the FCA, crypto enthusiasts are expected a similar rush in the UK.
Earlier today, London Stock Exchange (LSE) confirmed that it would start to accept applications to list Bitcoin and Ethereum crypto ETNs from the second quarter.
A confirmation date for when LSE will begin to accept these applications will be confirmed “in due course”.
In recent weeks, the price of Bitcoin has been bolstered ahead of the next “halving event” which is due to take place in April.
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The cryptocurrency has seen its value skyrocket due to major investment firms being allowed to offer ETFs
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“Halving”, which happens every four years, refers to when there is a limit placed on the rate of new coins being released.
Furthermore, prices have been inflated due to growing demand from investors while there are expectations of a limited supply.
Kathleen Brooks, a research director at XTB, added: “There has been $10 billion poured into the Bitcoin ETFs that launched earlier this year, and there are signs that a small allocation to alterative asset classes like Bitcoin are worthwhile for longer term investors and institutional investors.
“We think that these two 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.”