The Financial Conduct Authority (FCA) has approved the listing of Bitcoin and Ethereum exchange-traded products (ETPs) on the London Stock Exchange (LSE). This approval is a historical moment for the crypto industry and WisdomTree, the asset manager behind the ETPs.
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With a management expense ratio pegged at just 35 basis points, these offerings rank among Europe’s most economical institutional-grade cryptocurrency products, enhancing crypto’s legitimacy in the traditional finance industry.
ETPs to Start Trading in Six Days
On May 28, WisdomTree Physical Bitcoin (BTCW) and Physical Ethereum (ETHW) will be available exclusively to professional investors.
According to Alexis Marinof, WisdomTree’s Head of Europe, the FCA’s green light is more than a regulatory win. It’s a gateway to greater institutional participation. In his words:
FCA approval in this respect could result in greater institutional adoption of the asset class, as many professional investors have been unable to gain exposure to Bitcoin and other cryptocurrencies due to regulatory limitations and uncertainty – we would expect FCA approval of our crypto ETPs’ prospectus to remove those barriers to entry.
Interestingly, WisdomTree’s latest success isn’t its first foray into cryptocurrency-backed financial instruments. In 2019, the company became the first to launch physically-backed Bitcoin ETPs for European investors.
WisdomTree’s Crypto Portfolio Grows
According to the company’s announcement today, its portfolio has expanded to include eight different crypto ETPs. These products provide direct price exposure to popular cryptocurrencies like Bitcoin and Ethereum, as well as to a diversified basket of other crypto assets.
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Marinof further emphasized that while UK-based professional investors had previously accessed similar products through foreign exchanges, they can now engage directly through a domestic platform. Marinof anticipates this easier access could encourage a wider adoption among institutional investors, who have hesitated due to regulatory uncertainties.
Meanwhile, the FCA upholds strict guidelines that prevent retail investors from engaging with these high-risk crypto products. The authority maintains that crypto asset-backed ETNs and cryptocurrency derivatives are unsuitable for retail consumption, thus continuing the ban on selling such products to non-professional consumers.
FCA Is Expanding Horizons
The FCA’s decision aligns with its earlier declarations in March, which indicated a willingness to consider ETP listings from financial institutions geared toward professional investors. This listing is part of a broader movement towards integrating cryptocurrency into formal financial markets, as evidenced by the LSE’s readiness to entertain applications for Bitcoin and Ethereum-based products starting this quarter.
Further solidifying its commitment, the FCA noted that it would not oppose requests from Recognised Investment Exchanges to establish market segments for crypto asset-backed exchange-traded notes (ETNs). This move underscores the regulatory body’s intention to foster an environment where professional investors can engage with crypto assets under adequate protections.
WisdomTree’s crypto ETPs are listed on several prominent European exchanges, including Deutsche Börse Xetra, the Swiss Stock Exchange SIX, and Euronext exchanges in Paris and Amsterdam. This widespread availability across reputable platforms is proof of crypto’s growing acceptance and institutionalization.
Cryptopolitan reporting by Jai Hamid
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