London Stock Exchange introduces Bitcoin and Ethereum ETPs following approval by FCA

The London Stock Exchange (LSE) has received approval from the Financial Conduct Authority (FCA) to launch exchange-traded products (ETPs) based on Bitcoin and Ethereum. The WisdomTree Physical Bitcoin ETP and the WisdomTree Physical Ethereum ETP are expected to start trading on May 28. These ETPs will only be accessible to professional and institutional investors, as retail customers are prohibited from trading crypto derivatives since 2021. The approval from the FCA will make it easier for professional investors in the UK to invest in crypto-backed products, as they currently have to access them through overseas exchanges. The LSE had previously announced that applications for cryptocurrency ETPs were open until April 8, with approved funds being listed in May, pending clearance from the FCA. To obtain FCA approval, the crypto ETPs must be denominated in Bitcoin or Ethereum, physically backed, non-leveraged, and they must hold the underlying assets in cold storage through a licensed custodian in the US, UK, or EU. The success of spot Bitcoin ETFs in the US, with billions of dollars flowing into them, has prompted other governments to offer crypto accessibility to investors. Hong Kong has also approved the listing of spot Bitcoin and Ethereum ETFs, which have additional features such as in-kind transfers and the ability to purchase and redeem ETF units instantly using Bitcoin or Ethereum. However, these ETFs have not achieved the same level of impact as their US counterparts, attracting only $22.5 million on their first trading day.