June 18, 2024
Bitcoin News

UK Greenlights Bitcoin & Ethereum ETPs for Institutional Investors

The London Stock Exchange (LSE) will welcome its first Bitcoin and Ethereum-based exchange-traded products (ETPs) after the Financial Conduct Authority (FCA) greenlit their launch on May 22nd. The WisdomTree Physical Bitcoin ETP (WBTC) and the WisdomTree Physical Ethereum ETP (WETH) are expected to begin trading on May 28th, according to ETF Stream.

Limited Access for Now

Retail investors will be left out of this initial offering. This is because the 2021 ban restricts them from trading crypto derivatives and ETPs.

However, professional and institutional investors will now have a more convenient way to access crypto-backed products through the LSE, as opposed to relying on overseas exchanges.

Alexis Marinof, head of Europe at WisdomTree, highlighted this benefit, stating the FCA approval simplifies investment for UK-based professionals.

Strict Criteria for Crypto ETP Listing

The LSE announced the application window for cryptocurrency ETPs in March, with listings subject to FCA approval. To gain this approval, ETPs must be physically backed by either Bitcoin or Ether, not use leverage, and be denominated in the corresponding cryptocurrency.

Additionally, issuers must partner with a licensed custodian and hold the underlying assets in secure cold storage.

Global Trend: Following the US Lead

The success of spot Bitcoin ETFs in the US, attracting billions in investments, has triggered a domino effect. The UK’s move follows similar actions by Hong Kong, which also approved spot Bitcoin and Ether ETFs. However, these Hong Kong products haven’t replicated the US’s success. They have attracted only a fraction of the investment on their launch day.

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Disclosure Statement: Miami Crypto does not take any external funding, or support to bring crypto news to the readers. We do not have any conflicts of interest while writing news stories on Miami Crypto.

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