Bitcoin exchange-traded products offered by 21Shares and WisdomTree have gone live on the London Stock Exchange (LSE), the 11th biggest stock exchange in the world by trading volume.
As reported by U.Today, their listing was greenlit by the Financial Conduct Authority (FCA), London's main financial regulator body, last week.
However, they are unlikely to attract strong demand since retail investors will not be able to buy these ETPs. The FCA expressed concerns about the potential harm that these products might cause to retail buyers.
European regulations prevent issuers from offering exchange-traded funds (ETFs) for a single commodity like Bitcoin due to diversification rules.
Alex DovbnyaCryptocurrency ETPs, which have been around for years, provide buyers with a rather similar investment experience. These products also claim to offer the same level of transparency and investor protection.
The key difference is that ETPs accept the underlying asset in-kind, which means that authorized participants or issuers exchange the crypto asset themselves for shares of the corresponding ETP. For comparison, US-based Bitcoin ETFs, such as BlackRock's IBIT, exchange cash for ETP shares.
Tomiwabold OlajideBitcoin ETPs from 21Shares and WisdomTree are also available on stock exchanges in Germany and Switzerland.
21Shares Ophelia Snyder has noted that the UK has one of the most liquid capital markets in the world.
The U.K.'s main financial regulator, however, remains cautious about the industry. It recently defended its slow pace of approving crypto applications, claiming that it wants to prioritize trust.
Vladislav Sopov
Tomiwabold Olajide
Dan Burgin