The London Stock Exchange (LSE) is poised to make history by listing cryptocurrency exchange-traded products (ETPs) for the first time on May 28. This milestone follows the Financial Conduct Authority's (FCA) approval of prospectuses from WisdomTree and 21Shares, with Invesco also receiving approval for its product.
Key Details
- Products: WisdomTree’s Physical Bitcoin (BTCW) and Physical Ethereum ETPs, along with 21Shares’ bitcoin and ether offerings.
- Audience: Exclusively for professional investors (retail ban remains).
- Fees: WisdomTree charges 35 basis points; 21Shares’ fees undisclosed.
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Regulatory Shift
The FCA adjusted its stance in March 2024, permitting institutional crypto ETPs after a 2020 ban on retail crypto derivatives. This aligns with global trends, including:
- U.S. spot bitcoin ETF approvals (January 2024).
- European crypto ETPs trading since 2020.
FAQs
Why are these ETPs limited to professionals?
The FCA maintains strict retail investor protections due to crypto’s volatility but recognizes institutional demand.
How do these products compare to U.S. spot ETFs?
Unlike U.S. ETFs, LSE’s ETPs are physically backed and trade similarly to European counterparts.
What’s next for crypto in the U.K.?
Expect more approvals as the FCA refines its framework, potentially expanding access cautiously.
Market Impact
The LSE’s move signals growing institutional crypto adoption, with WisdomTree and 21Shares leading the charge. Analysts speculate this could spur further innovation, such as:
- Multi-asset crypto ETPs.
- Staking yield-integrated products.
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Note: Invesco and the LSE declined to comment.
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