Following approval from the Financial Conduct Authority (FCA) on May 22, the London Stock Exchange (LSE) is set to introduce exchange-traded products (ETPs) based on Bitcoin and Ethereum. The WisdomTree Physical Bitcoin ETP and the WisdomTree Physical Ethereum ETP are among the first crypto ETPs to be listed in the UK and are scheduled to commence trading on May 28, as reported by ETF Stream. However, these ETPs will only be accessible to professional and institutional investors due to the ban on retail customers trading crypto derivatives that was implemented in 2021. The listing of WisdomTree’s ETPs comes almost two months after the LSE’s public notice. Alexis Marinof, head of Europe at WisdomTree, stated that the FCA’s approval of their crypto ETPs’ prospectus will make it simpler for UK-based professional investors to invest in crypto-backed products, as they currently have to access crypto ETPs via overseas exchanges. The LSE announced on March 25 that applications for cryptocurrency ETPs were open until April 8, and accepted funds would be listed in May, pending clearance from the FCA. To obtain FCA approval, the crypto ETPs must only be denominated in Bitcoin or Ether, be physically backed, and be non-leveraged. The issuers must also collaborate with an Anti-Money Laundering licensed custodian in the US, UK, or the EU and store the underlying assets in cold storage. The approval of spot Bitcoin ETFs by the US Securities and Exchange Commission, along with their subsequent success in the market, which has seen billions of dollars flow into the ETFs, has prompted several other governments worldwide to offer crypto accessibility to investors. Hong Kong has also approved the listing of spot Bitcoin and Ether ETFs, which differ from the US-based spot BTC ETFs in that they allow in-kind transfers and denominations in three fiat currencies. Investors can instantly purchase and redeem ETF units using Bitcoin or Ether. However, despite the improved accessibility, the ETFs did not achieve the same impact as the US-based Bitcoin ETFs, attracting only $22.5 million on the first day of trading.
London Stock Exchange welcomes Bitcoin and Ethereum ETPs following FCA approval