In a landmark move for the UK’s cryptocurrency market, asset managers WisdomTree and 21Shares have secured approval from the Financial Conduct Authority (FCA) to list physically-backed bitcoin and ether exchange-traded products (ETPs) on the London Stock Exchange (LSE).
TLDR
WisdomTree and 21Shares have received approval from the UK’s Financial Conduct Authority (FCA) to list physically-backed bitcoin and ether exchange-traded products (ETPs) on the London Stock Exchange (LSE).
The ETPs are expected to start trading on May 28, making them the first crypto ETPs to be listed on the LSE.
The FCA’s approval comes after it adjusted its stance on crypto ETPs in March, allowing them to be listed for professional investors only, while maintaining the ban for retail investors.
WisdomTree’s ETPs will have a management expense ratio of 0.35%, representing one of the lowest fee levels for institutional-grade bitcoin and ether ETPs in Europe.
The FCA approval is expected to remove barriers to entry and could result in greater institutional adoption of cryptocurrencies in the UK.
The ETPs, which are set to begin trading on May 28, will mark the first time crypto ETPs have been listed on the LSE, nearly a decade after similar products first appeared in Sweden.
The FCA’s approval comes after the regulator adjusted its stance on crypto ETPs in March, stating that it would no longer object to requests from financial institutions seeking to list these products for professional investors.
However, the ban on crypto derivatives products, including ETPs for retail investors, remains in place.
This decision sets the UK apart from many other markets, such as continental Europe, Australia, Brazil, Canada, Hong Kong, and the United States, where crypto ETPs are available to both retail and institutional investors.
WisdomTree, a US-based asset manager with $111 billion under management globally, will list its WisdomTree Physical Bitcoin (BTCW) and WisdomTree Physical Ethereum (ETHW) ETPs with a management expense ratio of 0.35%. Alexis Marinof, head of Europe at WisdomTree, described the FCA’s approval as
“a significant step forward for the industry and UK-based professional investors seeking exposure to the asset class.”
He added that the approval could lead to greater institutional adoption of cryptocurrencies in the UK, as many professional investors have previously been unable to gain exposure due to regulatory limitations and uncertainty.
Similarly, 21Shares, a Zurich-based firm, will cross-list its existing Bitcoin and Ethereum Staking ETPs in the UK, with fees of 1.49%.
Ophelia Snyder, co-founder of 21Shares, emphasized the importance of London as a financial hub, stating that the city “hosts one of the deepest, most liquid capital markets in the world — where there is proven institutional interest in cryptocurrencies.”
The UK-listed crypto funds will be constructed as exchange-traded notes (ETNs), a common structure in the European cryptocurrency market.
The FCA has only approved vehicles that invest in bitcoin and ether and are unleveraged and physically backed.
Despite the retail investor ban, issuers remain optimistic about the potential interest from UK-based professional investors, citing the success of US-listed spot bitcoin ETFs, which have attracted more than 900 institutional investors.
Ravinder Azad, head of UK sales at WisdomTree, noted that hedge funds, small family offices, private banks, discretionary fund managers, and multi-asset managers have shown an appetite for crypto ETFs.
The company has seen a significant increase in interest, with sign-ups for a crypto webinar in June already exceeding 140, compared to just 14 institutional investors attending a similar event earlier this year.
The growing interest in digital assets among institutional investors is further evidenced by Brown Brothers Harriman’s 2024 Global ETF Investor Survey, which found that in the US, Europe, and Greater China, more institutional investors were bullish about the prospects for digital assets than any other asset class over the next 12 months.
While the retail investor ban may limit the overall market potential, the FCA’s approval of these products marks a milestone in the evolution of the UK’s cryptocurrency market and could pave the way for greater institutional adoption in the future.
The post Crypto ETPs Arrive in the UK: WisdomTree & 21Shares Secure FCA Approval for Bitcoin and Ether ETPs appeared first on Blockonomi.
