UK Approves First Bitcoin and Ether ETPs for Professional Investors, Trading Begins May 28

On May 22, WisdomTree announced that the FCA had given the green light for their Physical Bitcoin and Ethereum ETPs to be traded on the LSE starting May 28, 2024.

These products will directly hold Bitcoin and Ether; however, they will be limited to professional investors. They will have an expense ratio of 0.35%, aligning with similar products listed in Europe. 

Wisdom’s ETPs are designed as exchange-traded notes (ETNs), a widely used structure in the European cryptocurrency market. This structure ensures that the ETPs are unleveraged and physically backed by the underlying assets, providing a secure investment option for professional investors.

The move follows the FCA’s gradual relaxation of its stance on crypto derivatives, aiming to increase institutional adoption of digital assets in the U.K. Other issuers, including ETC Group, 21Shares, and CoinShares, have also applied for similar approvals. ETC Group’s application is reportedly still in progress.

“FCA approval of our crypto ETPs’ prospectus is a significant step forward for the industry and UK-based professional investors seeking exposure to the asset class,” said Alexis Marinof, WisdomTree’s Head of Operations in Europe

The FCA’s move is in tandem with the trend of countries trying to integrate digital assets into their mainstream financial markets. In late April, Hong Kong approved Bitcoin and Ether ETFs for public trading in the region following the United States’s Securities and Exchange Commission (SEC) approval of multiple spot Bitcoin ETFs in January 2024.

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• South Korea’s Ruling Party Pledges to Permit Spot Bitcoin ETFs As General Elections Approach

• Australia’s Largest Stock Exchange Could Approve Spot Bitcoin ETFs by Late 2024 – Bloomberg

• Hong Kong’s Bitcoin and Ether ETF Launch Spark Speculations on Mainland China’s Participation

• Spot Crypto ETFs Launch in Hong Kong Creates Alternative Options for Chinese Investors — Industry Stakeholders

However, Hong Kong investors responded lukewarmly to the financial products compared to the United States. Only after five months of existence, the U.S. spot Bitcoin ETF market is now the biggest globally. It commands a market value of over $59 billion, with about 80% held by retail investors.

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