As cryptocurrency enthusiasts eagerly await the approval of a physically-backed Ethereum (ETH) exchange-traded fund (ETF) in the US, London has also seen a groundbreaking development.
The UK’s Financial Conduct Authority (FCA) has approved two crypto exchange-traded products (ETPs) by WisdomTree, which are soon to debut on the London Stock Exchange (LSE). 21Shares is also set to introduce its own instrument soon, after recent regulatory approval. ShareRewrite.
WisdomTree and 21Shares Become First Crypto ETPs Issuers in The UK
WisdomTree, a global issuer of exchange-traded products and funds with nearly $112 billion under management, announced on Wednesday that it received FCA approval to launch two new instruments on the LSE: WisdomTree Physical Bitcoin (BTCW) and WisdomTree Physical Ethereum (ETHW).
These physically backed ETPs are expected to launch next week, on May 28, 2024, and will initially be available only to professional investors, though there is a chance they will also reach retail investors in the future.
"While UK-based professional investors have been able to allocate to crypto ETPs via overseas exchanges, they will soon have a more convenient access point," commented Alexis Marinof, the Head of Europe at WisdomTree.
The new instrument is set to offer competitive trading conditions compared to other crypto ETPs listed in Europe. The management expense ratio (MER) will be 0.35%.
"FCA approval in this regard could result in greater institutional adoption of the asset class, as many professional investors have been unable to gain exposure to Bitcoin and other cryptocurrencies due to regulatory limitations and uncertainty," Marinof added.
21Shares is also entering the market and already offers cryptocurrency instruments on nearly a dozen different exchanges.
"London hosts one of the deepest, most liquid capital markets in the world - where there is proven institutional interest in cryptocurrencies," said Ophelia Snyder, the Co-Founder of 21Shares. "As the largest global issuer of crypto-backed ETPs with more than 40 funds listed on 11 different exchanges, we are delighted to be listing on the London Stock Exchange, following a recent approval from the FCA."
WisdomTree Bitcoin Fund
It's important to note that WisdomTree was one of the first to issue crypto ETPs in Europe in 2019, a year after 21Shares introduced this type of instrument. They currently offer a range of such instruments, which are listed on exchanges in Germany, Switzerland, and in Paris and Amsterdam.
WisdomTree was also among the companies that launched the first-ever spot Bitcoin ETF on Wall Street in the first half of January 2024.
„The WisdomTree Bitcoin Fund is an exchange-traded fund whose investment objective is to gain exposure to the price of bitcoin, less expenses and liabilities, by holding bitcoin. The Fund will generally value its shares daily using an independently calculated value based on an aggregation of executed trade flow of major bitcoin spot exchanges,” the WisdomTree commented.
BTCW is currently priced at just under $74, close to its historical highs and showing a direct correlation with the price of Bitcoin. Since the lows of January, it has gained over 80%.
What is the difference between ETP and ETF? ETPs are a broad category that includes various investment instruments like ETFs, exchange-traded nots (ETNs), and exchange -traded commodities (ETCs). ETFs are a specific type of ETP, so all ETFs are ETPs but not all ETPs are ETFs.
