FCA Bans Bitcoin and Ethereum ETNs and Derivatives

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The British Financial Conducts Authority (FCA) has banned crypto Exchange Traded Notes (ETNs) and derivatives. They say cryptos are volatile, have “no reliable basis for valuation,” there’s “inadequate understanding” of cryptos by “retail consumers” and the best of them all there is a “lack of legitimate investment need for retail consumers to invest in these products.” Numerous studies have ascertained bitcoin in particular but also eth has some desirable qualities from an investment perspective. In particular they are a diversifier in an investment portfolio as they do not correlate with other asset classes like stocks or gold. Bitcoin also has been found to be a hedge against geopolitical risks which means returns can be higher or losses can be lower in an investment portfolio with bitcoin. Due to that, there’s a specific need for a bitcoin ETN as that’s the only available way to access bitcoin through a stocks portfolio…

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