As cryptocurrency enthusiasts eagerly anticipate the approval of a physically-backed Ethereum (ETH) exchange-traded fund (ETF) in the US, London has witnessed a significant breakthrough.
The UK’s Financial Conduct Authority (FCA) has given the green light to two crypto exchange-traded products (ETPs) by WisdomTree, set to debut on the London Stock Exchange (LSE). Additionally, 21Shares is poised to introduce its own instrument following recent regulatory approval.
WisdomTree, a global issuer of exchange-traded products and funds managing nearly $112 billion, announced the FCA’s approval to launch two new instruments on the LSE: WisdomTree Physical Bitcoin (BTCW) and WisdomTree Physical Ethereum (ETHW). These physically backed ETPs are slated to launch on May 28, 2024, initially available to professional investors with potential access for retail investors in the future.
Alexis Marinof, WisdomTree’s Head of Europe, noted that UK-based professional investors will soon have a more accessible avenue to allocate to crypto ETPs, potentially driving greater institutional adoption due to improved trading conditions and a management expense ratio (MER) of 0.35%.
Meanwhile, 21Shares is entering the market with cryptocurrency instruments already available on nearly a dozen exchanges. Ophelia Snyder, Co-Founder of 21Shares, highlighted London’s deep and liquid capital markets, expressing excitement about listing on the LSE following FCA approval.
Notably, WisdomTree and 21Shares were pioneers in issuing crypto ETPs in Europe, with WisdomTree launching these instruments in 2019, followed by 21Shares a year later. Both companies offer a range of such instruments listed on exchanges across Europe.
WisdomTree’s Bitcoin Fund, which aims to gain exposure to bitcoin’s price movements, has been trading close to its historical highs, currently priced at just under $74, showcasing a direct correlation with Bitcoin’s price. Since January, it has surged over 80%.
It’s crucial to understand the difference between ETPs and ETFs: ETPs encompass various investment instruments like ETFs, exchange-traded notes (ETNs), and exchange-traded commodities (ETCs). ETFs, on the other hand, are a specific type of ETP, indicating that while all ETFs are ETPs, not all ETPs are ETFs.