Bitcoin tops US$72,000 for the first time

Bitcoin prices surged above $72,000, hitting a new record high following the British financial watchdog's announcement.

The Financial Conduct Authority (FCA) will allow recognized investment exchanges to list crypto-backed exchange-traded notes (ETNs) in the UK for the first time.

Exchanges must meet specific requirements to ensure orderly trading and protection for professional investors, including issuing prospectuses and ongoing disclosures.

Bitcoin reached $72,211.51 but slightly receded to below $71,530.13, while Ether climbed to $4,041.23.

The London Stock Exchange will accept applications for admission of bitcoin and ether ETNs starting the second quarter of the year.

Only professional investors are allowed to buy ETNs, as the UK prohibits retail investors due to perceived risks.

The FCA maintains a ban on selling crypto-linked ETNs and derivatives to retail consumers due to high risks and lack of regulation.

The move by UK regulators follows the approval of spot bitcoin exchange-traded funds (ETFs) by US counterparts, leading to increased institutional investment in cryptocurrencies.

Unlike ETFs, ETNs are unsecured debt securities linked to market indexes, and they promise to pay out the full value of the index at maturity minus management fees.

The FCA's decision to allow crypto-linked ETNs contrasts with its previous ban in 2020 due to concerns about extreme price volatility and financial crime harming consumers.