- WisdomTree’s Physical Bitcoin and Ethereum ETPs receive FCA approval and will debut on the London Stock Exchange on May 28.
- The ETPs, designed for professional and institutional investors, follow the UK’s 2021 ban on crypto derivatives for retail trading.
- The launch aims to provide UK investors with easier access to crypto investments, traditionally available via foreign exchanges.
The Financial Conduct Authority (FCA) has approved the listing of two exchange-traded products (ETPs) based on Bitcoin and Ethereum. These products, offered by WisdomTree, are set to begin trading on the London Stock Exchange (LSE) on May 28, marking a notable expansion in the crypto investment landscape.
Targeting Professional Investors
The WisdomTree Physical Bitcoin ETP and the WisdomTree Physical Ethereum ETP will be available exclusively to professional and institutional investors. This limitation aligns with the UK’s 2021 regulation that prohibits retail customers from trading in crypto derivatives, reflecting a cautious approach towards broader retail involvement in high-risk crypto assets.
Enhancing Access to Crypto Investments
According to WisdomTree, the FCA’s endorsement facilitates simpler access for UK-based professional investors to engage with crypto-backed products. Until now, such investors had to seek avenues in overseas markets to invest in similar ETPs. The initiative to open applications for crypto ETPs on the LSE earlier this year was a strategic move to integrate more crypto options into the UK’s financial markets.
Criteria for FCA Approval
To comply with FCA regulations, the ETPs must exclusively involve Bitcoin or Ethereum, be physically backed by these cryptocurrencies, and utilize non-leveraged structures. Moreover, the issuers are required to collaborate with an Anti-Money Laundering (AML) licensed custodian from the US, UK, or EU, and ensure that the underlying crypto assets are stored securely in cold storage.
Global Trends and Comparative Insights
The UK’s move to list crypto ETPs follows a global trend spurred by the successful launch of spot Bitcoin ETFs in the US, which significantly influenced other governments to enhance crypto accessibility for investors.
