Only professional and institutional investors will have access to the ETPs, as retail customers are prohibited from trading crypto derivatives.
Following approval by the Financial Conduct Authority (FCA) on May 22, Bitcoin and Ethereum-based exchange-traded products (ETPs) are poised to launch on the London Stock Exchange (LSE). The WisdomTree Physical Bitcoin ETP and the WisdomTree Physical Ethereum ETP are among the initial crypto ETPs to be listed in the U.K. and are slated to commence trading on May 28, as reported by ETF Stream.
These ETPs will be exclusively accessible to professional and institutional investors, in line with the 2021 prohibition on retail customers trading crypto derivatives. WisdomTree’s two ETPs are being listed almost two months following the LSE’s public announcement.
Alexis Marinof, head of Europe at WisdomTree, highlighted that the FCA’s approval of their crypto ETPs’ prospectus will streamline the process for U.K.-based professional investors to engage with crypto-backed products. This approval opens avenues for investors who previously accessed crypto ETPs through international exchanges.
In a public announcement on March 25, the London Stock Exchange (LSE) disclosed that applications for cryptocurrency Exchange-Traded Products (ETPs) are open until April 8. The accepted funds are slated to be listed in May, pending clearance by the Financial Conduct Authority (FCA), the nation’s financial regulator.
To secure FCA approval, the crypto ETPs must adhere to several criteria. They should solely be denominated in Bitcoin (BTC), currently priced at $69,581, or Ether (ETH), currently priced at $3,735. Additionally, they must be physically backed and non-leveraged. Issuers are also required to collaborate with an Anti-Money Laundering licensed custodian in either the United States, the United Kingdom, or the European Union, and the underlying assets must be held in cold storage.
The approval of spot Bitcoin ETFs by the U.S. Securities and Exchange Commission and their subsequent market success, with billions pouring into the ETFs, has spurred several governments worldwide to provide crypto investment opportunities.
Hong Kong recently greenlit the listing of spot Bitcoin and Ether ETFs. Differing from their U.S. counterparts, these Hong Kong ETFs offer unique features like in-kind transfers and are available in three fiat currency denominations. Investors have the option to instantly buy or redeem ETF units using Bitcoin or Ether.
Despite these enhancements in accessibility, the impact of the ETFs fell short of expectations, with only $22.5 million attracted on the first day of trading.
Read More: Crypto companies focus on custody market amid increasing institutional adoption
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