Kraken exec advocates for Bitcoin ETF in the UK

Kraken UK managing director Bivu Das is calling for the introduction of Bitcoin exchange-traded fund (ETF) in the UK.

Speaking during an interview at the Digital Asset Summit in London, Das stated that Bitcoin ETFs, which are restricted in the UK, can offer investors an opportunity to make decent returns.

“The UK has always said it wants to be a crypto hub. And this is one of the basic fundamentals potentially for meeting that definition,” said Das.

He added that restrictions against the product in the UK may result in investors seeking them out in unregulated jurisdictions, which may not be good for them or the UK.

Bitcoin ETFs allow investors to get exposure to the value of Bitcoin (BTC), without directly owning the cryptocurrency.

ETFs trade on traditional stock exchanges, and their value rises when the underlying asset’s price increases, or falls if it decreases.

Back in 2021, the UK’s Financial Conduct Authority (FCA) banned the retail sale of digital asset derivatives, including exchange-traded products (ETPs) that were backed by crypto.

However, Das argues that since then, the financial landscape has changed dramatically from a regulatory perspective. He stated that Bitcoin ETFs could reduce regulatory concerns since the investor doesn’t directly own the underlying asset.

FCA opening up to crypto ETFs?

The UK recently approved the launch of crypto exchange-traded notes (ETNs), however, they will only be available to institutional investors and not for retail. This is unlike Bitcoin ETFs in the US, which are available to anyone.

Observers feel the move signaled an openness by the FCA, allowing recognized investment exchanges to list these products for trading. However, the regulatory body remains cautious, warning that retail investors may face significant risks associated with crypto derivatives and ETNs.

Das highlighted the massive adoption of Bitcoin ETFs in the U.S. after the SEC approval in January, stating that it legitimized Bitcoin in the crypto market, more broadly for institutions.

Coinbase UK CEO Daniel Seifert supports Das’ view on bringing Bitcoin ETFs to the UK, stating that it is better when consumers have more options.

The FCA now faces a balancing act between fostering innovation in the crypto space and protecting retail investors from potential harm.

But with the recent influx of investments into crypto ETFs, exemplified by billions in net inflows, there’s a growing interest in expanding access to crypto investment products.