Bitcoin and Ethereum-based exchange-traded products (ETPs) are set to debut on the London Stock Exchange (LSE) following approval by the Financial Conduct Authority (FCA) on May 22.
WidomTree’s physical Bitcoin ETP with ticker symbol WBTC and the physical Ethereum ETP (WETH) will be among the first set of crypto ETPs to be listed in the United Kingdom and are expected to begin trading on May 28, reported ETF Stream.
The physical ETPs will only be available to professional and institutional investors as the retail ban on crypto trading and sale of crypto derivatives and ETPs was enacted in January 2021. The listing of WisdomTree's two ETPs comes nearly two months after the LSE’s public notice.
Alexis Marinof, head of Europe at WisdomTree, said that the FCA approval of their crypto ETPs’ prospectus will make it easier for the UK-based professional investors to invest in crypto-backed products which currently access crypto ETPs via overseas exchanges,
In a public announcement on March 25, LSE notified that applications for the cryptocurrency ETPs are open until April 8; accepted funds will be listed the following month, subject to clearance by the nation’s financial regulator, thFCA.
To gain FCA approval, the crypto ETPs should only be denominated in Bitcoin (BTC) or Ether (ETH), be physically backed, and be non-leveraged. The issuers must also partner with an Anti-Money Laundering licensed custodian in the United States, the United Kingdom, or the European Union and hold the underlying assets in cold storage.
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The approval of Bitcoin ETFs by the United States Securities and Exchange Commission and its subsequent success, which saw billions flow into these ETFs weekly, have prompted several other governments around the globe to offer crypto accessibility to investors.
Apart from the U.K., Hong Kong was another region to approve the listing of Bitcoin and Ether ETFs. These spot cryptocurrency ETFs from Hong Kong were regarded as a significant improvement over their U.S. counterparts due to features like in-kind transfers and denominations in three fiat currencies. Investors can instantly purchase and redeem ETF units using Bitcoin or Ether.
However, despite improved accessibility, these ETFs failed to achieve the same impact as the US-based BTC ETFs, attracting only $22.5 million on the first trading day.
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