Short-term market frenzy and hidden worries
UK FCA lifts ban on retail investment in crypto ETNs (linked to Bitcoin/Ethereum), releasing over 6 million retail potential, pushing Bitcoin to rise over 2% in one hour, and BTC trading volume against GBP surges by 18%. Short-term liquidity injection may boost mainstream coin prices, but the scale of US spot Bitcoin ETFs has reached $130 billion, and the UK needs to address liquidity shortages, being vigilant about market premium risks.
High regulatory thresholds accelerate reshuffling
The UK will integrate crypto ETNs into the traditional securities regulatory framework, requiring listing only on FCA-approved exchanges (like the London Stock Exchange) and implementing strict disclosure and investor protection. This move eliminates small exchanges with high compliance costs, with giants like Kraken dominating the market, but the underlying assets of ETNs depend on centralized custody, and platform risks still exist.
Arbitrage game during policy vacuum period
Before the new regulations come into effect in 2026, two types of opportunities are emerging:
Premium arbitrage: Price differences between US/EU and UK ETNs create cross-border arbitrage windows; Compliance dividends: Exchanges that collect customer data in advance gain a competitive edge.
Be cautious of gray operations inducing retail investors to take on high premium products.
US-UK crypto hegemony covert battle
UK policy shift directly targets competition with the US: Trump promotes crypto-friendly policies, and the size of US ETFs is 8 times that of Europe. The UK plans to complete the regulatory framework before 2026, reduce capital gains tax to 10%, and pilot blockchain government bonds. If the US-UK 'Digital Asset Working Group' coordination fails, regulatory arbitrage may exacerbate volatility.
July 2025: FCA public consultation deadline, BTC/GBP volatility intensifies; End of 2025: Finalization of cryptocurrency legislation draft, institutions accelerate layout; 2026: New regulations implemented, market reshuffling completed.
The UK may temporarily boost mainstream coins, but the risks during the policy transition period (regulatory void, retail blind entry) cannot be ignored. It is recommended to closely monitor the ETN premium rate on the London Stock Exchange, favoring transparent assets like Bitcoin/Ethereum, and avoiding high-volatility small coins.
