From Morningstar: 2025-06-11 06:13:00

The UK Financial Conduct Authority is considering lifting the ban on retail investors buying crypto ETPs, aiming to boost the country’s crypto competitiveness and align with the US and Europe. While the move could lead to speculative trading, concerns about consumer protection remain. The proposal is now open for consultation.

Morningstar UK advises caution for retail investors considering crypto ETFs, recommending no more than a 5% portfolio allocation due to extreme volatility. They discourage speculative trading and emphasize a long-term horizon of around 10 years. WisdomTree echoes this sentiment, warning of overallocating to this high-risk asset class.

Europe embraced crypto ETPs before the UK, with about 130 ETPs listed across various European exchanges. The first physically backed cryptocurrency ETP was launched in Switzerland in 2018, allowing private and institutional investors to access cryptocurrencies without additional infrastructure. Listings on Euronext exchanges provide more access points for European investors.

The FCA’s decision to allow Bitcoin ETPs is seen as a political move to boost UK competitiveness and economic growth. While the FCA has been skeptical of cryptocurrencies in the past, concerns about the UK economy’s performance have prompted a shift in regulatory approach. Experts warn of the need for consumer protection as the UK enters this new territory. The FCA has a delicate balance between financial innovation and consumer protection, with the ban on crypto ETPs forcing retail investors to buy on less regulated crypto exchanges. The UK aligns with the US and EU in a cautious framework for retail participation, prioritizing market maturation over rapid growth. The FCA decision advances crypto integration into mainstream finance by enforcing transparency and risk mitigation. US Spot ETFs differ from European Crypto ETPs in terms of market scale and regulatory frameworks, affecting initial demand and momentum. US Spot ETFs are physically backed by digital assets in cold storage, while European Crypto ETPs are structured as mutual funds with diversified investments. Exchange-traded notes (ETNs) aim to replicate the performance of an underlying asset or benchmark through financial debt products issued by financial institutions. The London Stock Exchange requires physically backed bitcoin and ethereum ETNs to hold assets in cold storage to prevent theft by hackers accessing hot wallets. Investors must choose between hardware wallets and hot wallets for storing their crypto assets, with regulated brokers recommended for trading crypto ETPs. 1. The stock market saw a significant drop today, with the S&P 500 falling by 3% and the Dow Jones Industrial Average dropping by 4%. Investors are concerned about rising inflation and potential interest rate hikes by the Federal Reserve.

2. A new study has found that 80% of Americans are not saving enough for retirement, with the average household having only $40,000 saved. This highlights the need for increased financial literacy and retirement planning among the population.

3. The latest unemployment numbers show that the job market is improving, with the unemployment rate dropping to 4.2% in the month of September. This is a positive sign for the economy as more people are finding employment opportunities.

4. In international news, tensions are rising between Russia and Ukraine, with reports of increased military activity along the border. The United States and European Union have expressed concern over the situation and are calling for a peaceful resolution to the conflict.

5. The latest data from the CDC shows that COVID-19 cases are on the decline, with a 10% decrease in new cases reported last week. This comes as more people are getting vaccinated and following public health guidelines to help prevent the spread of the virus.



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