Bitcoin and Ethereum ETNs Hit London Stock Exchange Trading Floor

Crypto Reporter

Shalini Nagarajan

Crypto Reporter

Shalini Nagarajan

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Shalini is a crypto reporter who provides in-depth reports on daily developments and regulatory shifts in the cryptocurrency sector.

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May 28, 2024 05:02 EDT

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Investors in the UK can now trade exchange-traded products that track Bitcoin and Ethereum through the London Stock Exchange, as the country narrows the gap with other financial leaders in digital assets.

The move comes after the Financial Conduct Authority (FCA) approved the first crypto exchange-traded products from issuers including WisdomTree and 21Shares last week.

21Shares said it launched four new physically-backed crypto exchange-traded notes (ETNs) on Tuesday. The offerings include: 21Shares Bitcoin ETN, 21Shares Ethereum Staking ETN, 21Shares Bitcoin Core ETN, and the 21Shares Ethereum Core ETN.

Competing firm WisdomTree also entered the fray with two physically-backed ETPs: WisdomTree Physical Bitcoin and WisdomTree Physical Ethereum ETFs.

Listings from both issuers, as well as Invesco Digital Markets appeared on an FCA website featuring approvals on May 28.

FCA Restrictions Limit London Stock Exchange’s Crypto ETF Market

Despite directly holding Bitcoin or Ether, these new crypto products are restricted to professional investors only, under FCA regulations. This stricter approach contrasts with the US, where recently approved Bitcoin ETFs manage a combined $59b. This is nearly five times Europe’s total crypto vehicle trade volume.

Still, Alex Pollak, head of UK for 21Shares predicted that the UK will become Europe’s leading crypto ETF market within three years. But, he believes the key to the country’s success lies in allowing everyday investors to trade these products.

Earlier, this month, Alun Cairns, a Conservative UK Member of Parliament, urged the FCA to review its ban on crypto ETNs to retail investors. Expressing worries about the nation’s lagging position, he said that the general public would be deprived of opportunities.

US Surprises Market with Early Approval of Spot Ethereum ETFs

Elsewhere, the US Securities and Exchange Commission (SEC) gave the go-ahead to spot Ethereum ETFs last week. This marked a dramatic reversal for the market, as analysts weren’t expecting approval to come as early as May.

The move puts pressure on South Korean regulators to follow suit and potentially allow similar crypto investments.