
Not everyone is happy with theàU.K. Financial Conduct AuthorityâÂÂs decision toàban individual investors from speculatingàonàbitcoinàand other cryptocurrencies, and thereâÂÂs an argument to be made that the agencyâÂÂs rationale was hollow.àÃÂ
But the ban is likely to have a minimal impact, partly because the market is so small, CoinDeskâÂÂs 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 GrayscaleâÂÂs ETH Trust Becomes SEC-Reporting
The ban is set to take effect in January. Professional investors werenâÂÂt barred from trading cryptocurrency derivatives partly because they âÂÂhave greater understanding of the risks and greater capacity to absorb potential investment losses,â according to anàFCA report this month.ÃÂ
âÂÂThose still keen on trading crypto derivatives will just find ways to open accounts in unaffected regions,â Don Guo, CEO of Broctagon Fintech Group, told CoinDesk in an email. âÂÂThere is a stark risk that retail traders will simply trade on unregulated exchanges, which in fact puts them at more risk.âÂÂ
Among those affected, the proposal does appear to be quite unpopular: The FCA reportàindicated that some 97% of comments submitted in connection with the rulemaking wereàopposed to agencyâÂÂs proposed ban.
CoinDesk Research Director Noelle Acheson argued in her weeklyàCrypto Long & Shortànewsletteràthat the agency overstepped, since its âÂÂjob includes protecting investors, not passing judgment on new asset groups.â One of the agencyâÂÂs reasons for the ban was the âÂÂextreme volatilityâ in cryptocurrency prices, but bitcoin is far less volatile than many stocks, including Tesla.ÃÂ
Related: GrayscaleâÂÂs Ethereum Trust Granted SEC Reporting Company Status
Read More:ÃÂ UK Crypto Derivatives Ban Seen Having Limited Effect on Small Market
Bitcoin Watch
Bitcoin is struggling to extend the preceding weekâÂÂs 6.6% gain,àthe 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 â 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 sourceàBytetree.com.ÃÂ
The minerâÂÂs rolling inventory (MRI) figure, which tracks the changes in minersâ 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. ThatâÂÂs a bullish sign.àÃÂ
Also, the payment company SquareâÂÂs recent disclosure of their bitcoin investments has given market players a fresh shot of confidence, and technical bias has turned bullish with the cryptocurrencyâÂÂs 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
â Omkar Godbole
Read More:ÃÂ Bitcoin down 1% after biggest weekly price gain since July
Token Watch
Bitcoin (BTC):ÃÂ Someone just moved $11M of bitcoin that wasÃÂ tucked away in idle wallets since being mined in 2010.
Yearn.Finance (YFI):àProject creator Andre Cronje tells CoinDeskàheâÂÂs quitting the project, then tweets a denial.
WhatâÂÂs Hot
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 âÂÂreevaluating their previously held distrust of digital currency and assets,â and Wall Street broker-dealers may âÂÂplay a role in implementing regulations regarding the secondary market trading of digital asset securities.â (Greenberg Traurig)
Analogs
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 KongâÂÂs 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)
ChinaâÂÂs 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 ReserveâÂÂs emergency Main Street Lending Program (WSJ)
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