Bitcoin’s star is once again on the rise after a dark crypto winter, but investing in cryptocurrency still poses risks, Northeastern economic experts say. This week, the price of bitcoin, the leading crypto currency, temporarily reached an all-time high of $72,000. The surge in bitcoin’s valuation was made after regulators in the United Kingdom gave the go-ahead for Recognised Investment Exchanges to create a listed market segment for crypto-backed exchange traded notes or ETNs, the crypto trade publication Coin Desk reported. The move opens up the door for investment firms and other institutions in the U.K. to invest in “crypto-trading products.”
The U.K. is following in the footsteps of U.S. regulators, explains Ravi Sarathy, Northeastern University professor of international business and strategy and author of “Enterprise Strategy for Blockchain.” In January, the U.S. Securities and Exchange Commission green lit the first spot bitcoin exchange traded funds (ETF). ETFs are a tightly regulated type of investment funding. Essentially, by buying into a bitcoin ETF, an investor has the potential to make money as the price of bitcoin goes up without some of the security and technical challenges that come with buying crypto directly. “This year, the big news is that the SEC finally accepted bitcoin ETF, or exchange traded funds,” Sarathy says. “Once the SEC was pushed to accept bitcoin and say, ‘It’s OK to have an exchange traded fund,’ it became possible for a very large number of people to suddenly say, ‘Hey, I’ve been hearing about Bitcoin. Maybe now that it’s so easy, I should do it.’”
