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Currently in cryptocurrency, US-listed spot Bitcoin exchange-traded funds (ETFs) commenced October with billions in inflows, a crypto executive expected the Bitcoin price cycle to persist, and the United Kingdom’s Financial Conduct Authority (FCA) is set to revoke its prohibition on crypto exchange-traded notes (ETNs) for retail investors.
Bitcoin ETFs initiate “Uptober” with $3.2 billion in second-highest week on record
US-listed spot Bitcoin ETFs kicked off the traditionally bullish month of October with their second-highest week of inflows since their inception, indicating renewed investor enthusiasm.
Spot Bitcoin (BTC) ETFs documented $3.24 billion in total net positive inflows over the past week, almost equating to their peak of $3.38 billion in the week ending Nov. 22, 2024, according to data provided by SoSoValue.
This figure represents a significant rebound from the prior week’s $902 million in outflows. Analysts credited the reversal to increasing anticipations of another US interest rate reduction, enhancing sentiment towards risk assets.
Heightened anticipations for an additional US interest rate reduction prompted a “shift in sentiment,” drawing renewed investor interest towards Bitcoin ETFs, “bringing four-week inflows to nearly $4 billion,” Iliya Kalchev, dispatch analyst at digital asset platform Nexo, informed Cointelegraph. “Based on current run-rates, Q4 flows could withdraw over 100,000 BTC from circulation — more than twice the new issuance.”
“ETF absorption is gaining momentum while long-term holder distribution mellowes, facilitating BTC to establish a more robust foundation,” he added, near crucial technical support levels.
Steady ETF inflows may furnish notable tailwinds for Bitcoin in October, recognized as the second most favorable month for Bitcoin in terms of average historical yields, often referred to as “Uptober” by crypto enthusiasts.
This week’s $3.2 billion momentarily elevated Bitcoin’s price above $123,996 on Friday, marking over a six-week peak last recorded on Aug. 14 for the world’s inaugural cryptocurrency, TradingView data indicates.
“Very likely” Bitcoin cycle will persist in some manner: Gemini exec
While Bitcoin’s four-year cycle may not materialize in exactly the same way as it has historically, that does not imply the notion is entirely obsolete, as per a crypto executive.
“I believe that with respect to the four-year cycle, the reality is it’s quite probable that we’ll witness some form of a cycle continuing,” Saad Ahmed, head of the APAC region at crypto exchange Gemini, conveyed to Cointelegraph during a discussion at Token2049 in Singapore.
“It fundamentally arises from individuals getting extremely enthusiastic and stretching themselves too far, leading to a crash, followed by a correction back towards equilibrium,” Ahmed explained.
However, Ahmed mentioned that increasing institutional participation in the crypto sector could assist the market in managing some of the volatility. “You’ll witness a reduction in some of the volatility, but a form of cycle will still persist, as it’s ultimately driven by human emotions,” Ahmed stated.
Firms Reflect as UK Prepares to Lift Crypto ETN Ban
The UK’s FCA is poised to soon reverse a prohibition on crypto ETNs for retail investors enacted in 2019.
According to an Aug. 1 announcement, the UK regulator will remove the restriction on retail access to crypto ETNs beginning Wednesday, given they are traded on an “FCA-approved, UK-based investment exchange.” Unlike exchange-traded funds (ETFs), which remain prohibited in the UK for retail investors, ETNs represented debt instruments linked to crypto and not backed by any fundamental assets.
With the impending repeal of the ban, firms operating in the UK have been deliberating on what the regulatory alteration could signify for retail investors. BlackRock, the globe’s largest asset management firm, is reportedly exploring ways to provide its iShares Bitcoin exchange-traded product in preparation for retail trading on or after Oct. 8.
Bitwise CEO Hunter Horsley, whose company’s European operations are based in London, stated on X that he was “thrilled to finally serve more investors in our home market in Europe.”
“Previously, the UK has been an outlier regarding ETNs,” Ian Taylor, board adviser to the digital assets trade association CryptoUK, informed Cointelegraph. “We are optimistic that this initiative will enhance consumer protections, and we will persist in advocating for the removal of the prohibition on retail investors accessing highly regulated derivative products.”
Per an August notice from the FCA, any asset manager intending to offer ETN trading to UK retail investors must have them listed on a “Recognised Investment Exchange.” This decision followed consultations with businesses, trade organizations, and consumer groups.
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