Bitcoin early Monday rocketed to yet another all-time high after a United Kingdom financial regulator opened the door to allowing cryptocurrency-backed Exchange Traded Notes (cETNs) for professional investors. Listing could come as early as the second quarter. Cryptocurrency prices, spot bitcoin ETFs and related stocks broadly rose on the news. Elsewhere, MicroStrategy continues to stockpile bitcoin.
The U.K.'s Financial Conduct Authority (FCA) on Monday said it would not object to requests from recognized investment exchanges to create a U.K.-listed market segment for cETNs. Exchanges will need to ensure sufficient controls and protections are in place, and meet all the requirements for the UK Listing Regime, including issuing a prospectus and ongoing disclosures. The FCA said only professional investors would be able to buy the products. It continues to believe "cETNs and crypto derivatives are ill-suited for retail consumers due to the harm they pose," according to the release. The FCA noted crypto assets are "high risk and largely unregulated" and added "those who invest should be prepared to lose all their money."
The regulator will maintain its ban on cETNs and crypto derivatives for retail consumers. The FCA first banned crypto ETNs and derivatives for retail traders on Jan. 6, 2021.
The London Stock Exchange in a separate statement Monday said it will accept applications for bitcoin and ethereum ETNs in the second quarter of 2024. The exact launch date will be confirmed "in due course," according to the release.
The announcement opens the door for another wave of institutional adoption. The Jan. 11 launch of spot bitcoin ETFs in the U.S. powered bitcoin and cryptocurrency prices higher throughout February and March.
MicroStrategy Buys More Bitcoin
Meanwhile, Michael Saylor's software company MicroStrategy purchased 12,000 bitcoin for about $821.71 million in cash, according to a Monday regulatory filing. The purchases occurred between Feb. 26 and March 10, using $781.1 million of proceeds from a recent offering and $40.6 million of excess cash.
As of March 10, MicroStrategy holds 205,000 bitcoin with an average purchase price of $33,706 per coin.
The company last week announced plans for a $600 million private offering in order to buy more bitcoin.
Bitcoin And Crypto Price Action
Bitcoin rallied to a record high of $72,886 Monday, surpassing its previous all-time high above $70,000 from Friday. The world's top cryptocurrency eased back to $72,000 Monday afternoon but still vaulted more than 71% so far this year.
Cryptocurrency prices followed bitcoin higher. Ethereum on Monday peaked at $4,087, running up further against December 2021 levels. Ethereum on Friday crossed its $4,000 level for the first time in 26 months. The No. 2 crypto soared 78% in 2024 and is in striking distance of its record high of $4,865 from November 2021.
Shares of the new spot bitcoin ETFs broadly surged about 4% Monday. BlackRock's iShares Bitcoin Trust and ARK Invest's ARK 21Shares Bitcoin ETF both swung 3.9% higher. The bitcoin ETFs are all trading above their Jan. 11 launch-day prices.
Crypto exchange Coinbase ticked lower Monday after jumping 4% in early trade. Shares leapt more than 6% premarket. COIN stock is up more than 27% so far this month and spiked 46% so far in 2024.
Bitcoin miners fell Monday after President Joe Biden revealed his fiscal 2025 budget proposal, which included a crypto mining excise tax and addressed wash-trading rules, CoinDesk first reported. Wash trading involves selling an investment at a loss to reduce the tax burden and quickly repurchasing it.
Marathon Digital fell 12.1% Monday after climbing 5.3% premarket. Rival bitcoin miner CleanSpark tumbled 16.5% Monday after rallying 5% before the open.
MicroStrategy stock jumped 4.1%
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