Not everyone is happy with theÃÂ U.K. Financial Conduct AuthorityÃ¢ÂÂs decision toÃÂ ban individual investors from speculatingÃÂ onÃÂ bitcoinÃÂ and other cryptocurrencies, and thereÃ¢ÂÂs an argument to be made that the agencyÃ¢ÂÂs rationale was hollow.ÃÂ ÃÂ
But the ban is likely to have a minimal impact, partly because the market is so small, CoinDeskÃ¢ÂÂs Muyao Shen reported Monday, citing analysts and industry executives who track the trading business.
Some U.K.-based brokerages that had offered the crypto derivative products to retail traders could see a drop-off in revenue, though big cryptocurrency exchanges including Kraken say the impact is likely to be minimal. While U.K. individuals can still trade the actual cryptocurrencies, there may be some traders who will seek to skirt the rules by trading on offshore exchanges.ÃÂ
Related: Bitcoin and Ether Rally After GrayscaleÃ¢ÂÂs ETH Trust Becomes SEC-Reporting
The ban is set to take effect in January. Professional investors werenÃ¢ÂÂt barred from trading cryptocurrency derivatives partly because they Ã¢ÂÂhave greater understanding of the risks and greater capacity to absorb potential investment losses,Ã¢ÂÂ according to anÃÂ FCA report this month.ÃÂ
Ã¢ÂÂThose still keen on trading crypto derivatives will just find ways to open accounts in unaffected regions,Ã¢ÂÂ Don Guo, CEO of Broctagon Fintech Group, told CoinDesk in an email. Ã¢ÂÂThere is a stark risk that retail traders will simply trade on unregulated exchanges, which in fact puts them at more risk.Ã¢ÂÂ
Among those affected, the proposal does appear to be quite unpopular: The FCA reportÃÂ indicated that some 97% of comments submitted in connection with the rulemaking wereÃÂ opposed to agencyÃ¢ÂÂs proposed ban.
CoinDesk Research Director Noelle Acheson argued in her weeklyÃÂ Crypto Long & ShortÃÂ newsletterÃÂ that the agency overstepped, since its Ã¢ÂÂjob includes protecting investors, not passing judgment on new asset groups.Ã¢ÂÂ One of the agencyÃ¢ÂÂs reasons for the ban was the Ã¢ÂÂextreme volatilityÃ¢ÂÂ in cryptocurrency prices, but bitcoin is far less volatile than many stocks, including Tesla.ÃÂ
Related: GrayscaleÃ¢ÂÂs Ethereum Trust Granted SEC Reporting Company Status
Read More:ÃÂ UK Crypto Derivatives Ban Seen Having Limited Effect on Small Market
Bitcoin is struggling to extend the preceding weekÃ¢ÂÂs 6.6% gain,ÃÂ the biggest percentage rise since the last week of July.ÃÂ
The cryptocurrency is currently trading in the red near $11,250, having printed highs near $11,500 over the weekend.ÃÂ
The decline could be short-lived, as the global equity markets are trading in the green despite the resurgence of the coronavirus concerns across Europe.ÃÂ
Besides, the bitcoin market looks strong Ã¢ÂÂ the cryptocurrency rallied last week even though miners ran down inventory by 1,000 BTC by selling more than they mined, according to the MRI figure provided by data sourceÃÂ Bytetree.com.ÃÂ
The minerÃ¢ÂÂs rolling inventory (MRI) figure, which tracks the changes in minersÃ¢ÂÂ inventory levels, held well above 100% last week, as those responsible for generating coins boosted supply. The five- and 12-week MRIs are also holding above 100%.
In other words, the buying pressure has been strong enough to absorb extra supplies from those responsible for generating the cryptocurrencies. ThatÃ¢ÂÂs a bullish sign.ÃÂ ÃÂ
Also, the payment company SquareÃ¢ÂÂs recent disclosure of their bitcoin investments has given market players a fresh shot of confidence, and technical bias has turned bullish with the cryptocurrencyÃ¢ÂÂs weekly close above $11,200.
As per charts, resistances are located at $11,500 and $12,000. On the downside, support is seen at $11,000, which, if breached, could cause some short-term technical traders to exit the market.ÃÂ
Ã¢ÂÂ Omkar Godbole
Read More:ÃÂ Bitcoin down 1% after biggest weekly price gain since July
Bitcoin (BTC):ÃÂ Someone just moved $11M of bitcoin that wasÃÂ tucked away in idle wallets since being mined in 2010.
Yearn.Finance (YFI):ÃÂ Project creator Andre Cronje tells CoinDeskÃÂ heÃ¢ÂÂs quitting the project, then tweets a denial.
China pushes to accelerate digital yuan as Japan, other countries push development of their own central-bank digital currencies (South China Morning Post)ÃÂ
BitMEX cryptocurrency exchange hires anti-money-laundering expert as compliance chief after U.S. charges brought (CoinDesk)
World Bank estimates 1.7B people lack proper banking infrastructure to support monetary freedoms (Hacker Noon)
U.S. financial regulators are Ã¢ÂÂreevaluating their previously held distrust of digital currency and assets,Ã¢ÂÂ and Wall Street broker-dealers may Ã¢ÂÂplay a role in implementing regulations regarding the secondary market trading of digital asset securities.Ã¢ÂÂ (Greenberg Traurig)
The latest on the economy and traditional finance
U.S. at risk of losing stewardship of global financial system to China, says Ripple Executive Chairman Chris Larsen, blaming SEC (CoinDesk)
China moves to slow recent gains in yuan versus dollar (WSJ)
Bank of England asks British lenders to assess their readiness for negative interest rates (WSJ)
Wall Street analysts are starting to spin as bullish a clear-cut victory by Joe Biden in U.S. presidential elections (Bloomberg)
Democratic house speaker Nancy Pelosi says stimulus talks are at a standstill citing a lack of funding for the program (CoinDesk)
Hong KongÃ¢ÂÂs Chief Executive Carrie Lam Cheng Yuet is set to announce a new policy that balances economic recovery with covid-19 safe procedures, slated for Oct. 14 (SCMP)
ChinaÃ¢ÂÂs oldest investment bank will commence its Shanghai public share sale Wednesday aiming to raise $1B for expansion (Reuters)
One small lender in Florida accounts for 100 of 252 small-business loans made through Federal ReserveÃ¢ÂÂs emergency Main Street Lending Program (WSJ)
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