WisdomTree and 21Shares have recently announced plans to launch exchange-traded products (ETPs) backed by cryptocurrencies on the London Stock Exchange. This move comes after receiving approval from the UK’s financial regulator, the Financial Conduct Authority (FCA).
With the FCA’s approval of cryptoasset-backed exchange-traded notes (cETNs) for professional investors earlier this year, the investment landscape for cryptocurrencies in the UK is evolving rapidly. Despite warnings from regulators regarding the risks associated with cryptocurrencies, investors are increasingly turning to ETPs as a way to gain exposure to digital assets.
The approval of bitcoin exchange-traded funds by the U.S. Securities and Exchange Commission in January led to a surge in bitcoin’s price. Now, with expectations of the SEC approving a similar product for ether, the second-largest cryptocurrency, the market for digital assets is experiencing significant growth.
WisdomTree’s upcoming products will provide investors with exposure to both bitcoin and ether. These listings, scheduled for May 28, mark a milestone in the institutional adoption of cryptocurrency assets. According to Alexis Marinof, WisdomTree’s head of Europe, the FCA’s approval will make it easier for UK-based professional investors to allocate to crypto ETPs.
21Shares, known as the largest global issuer of crypto-backed ETPs, sees the London Stock Exchange as an ideal platform for listing its products. The deep and liquid capital markets in London, coupled with institutional interest in cryptocurrencies, make it a strategic choice for the company.
Despite the growing popularity of cryptocurrency investments, the FCA has warned that these assets are highly risky and largely unregulated. The regulator has banned the sale of cryptocurrencies to retail investors, emphasizing the potential harm they pose. Investors are advised to be prepared to lose all their money when investing in digital assets.
The launch of new ETPs backed by cryptocurrencies on the London Stock Exchange represents a significant development in the world of digital asset investments. With regulatory approvals in place and increasing institutional interest, the market for crypto ETPs is poised for continued growth in the UK and beyond.