First Mover: Bitcoin's Best Week Since July Shows Limited Toll of UK Retail Crypto Futures Ban

Oct 12, 2020 at 12:38 UTCUpdated Oct 12, 2020 at 13:29 UTC.Not everyone is happy with the U.K. Financial Conduct Authority's decision to ban individual investors from speculating on bitcoin and other cryptocurrencies, and there's an argument to be made that the agency's rationale was hollow.

The ban is likely to have a minimal impact, partly because the market is so small, CoinDesk's 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.

"Those still keen on trading crypto derivatives will just find ways to open accounts in unaffected regions," Don Guo, CEO of Broctagon Fintech Group, told CoinDesk in an email.

"There is a stark risk that retail traders will simply trade on unregulated exchanges, which in fact puts them at more risk."

CoinDesk Research Director Noelle Acheson argued in her weekly Crypto Long & Short newsletter that the agency overstepped, since its "Job includes protecting investors, not passing judgment on new asset groups." One of the agency's reasons for the ban was the "Extreme volatility" in cryptocurrency prices, but bitcoin is far less volatile than many stocks, including Tesla.

Bitcoin is struggling to extend the preceding week's 6.6% gain, the biggest percentage rise since the last week of July.The cryptocurrency is currently trading in the red near $11,250, having printed highs near $11,500 over the weekend.

The bitcoin market looks strong - 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 source Bytetree.com.

Bitcoin: Someone just moved $11M of bitcoin that was tucked away in idle wallets since being mined in 2010.Yearn.