The watchdog originally blocked ETNs over concerns about volatility and investor protection. Now, officials argue the market has matured, with better transparency and broader understanding among consumers.
Unlike ETFs, which directly hold assets like Bitcoin, ETNs are debt instruments that track crypto prices without giving investors ownership of the underlying tokens. They offer easier access through banks and brokers but carry issuer risk.
The FCA’s reversal doesn’t extend to derivatives, which remain off-limits for retail traders. Globally, however, derivative activity is booming, with Q2 volumes exceeding $20 trillion even as spot trading slowed.
In the US, Bitcoin ETFs continue to post record inflows, while regulators recently approved “in-kind” share swaps to streamline operations. Analysts say this change won’t affect small investors but reflects growing acceptance of crypto as a legitimate asset class.
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