Bitrabo Editorial
The UK’s Financial Conduct Authority (FCA) has approved the first crypto exchange-traded products (ETPs), marking a significant step in incorporating digital assets into the country’s financial sector.
This move puts the UK in line with other global financial hubs that have already accepted digital asset trading.
Regulatory Landscape and Global Perspectives
WisdomTree Inc. has been given the green light by the FCA to list two physically-backed crypto ETPs tracking Bitcoin and Ethereum on the London Stock Exchange.
These products are scheduled to commence trading on May 28, showing swift progress from regulatory approval to market availability.
Alongside WisdomTree, other issuers like ETC Group, 21Shares, and CoinShares have also sought to list their crypto offerings in the UK.
While these ETPs will directly hold Bitcoin and Ethereum, they will only be accessible to “professional investors,” as per FCA guidelines.
This stands in contrast to the United States, where recent approvals of Bitcoin ETFs have attracted around $59 billion in assets, surpassing the total in Europe.
Internationally, cryptocurrency ETPs have been present on various European stock exchanges for some time. The US has seen significant success with these products, notably following approvals by the Securities and Exchange Commission earlier this year, propelling Bitcoin to new highs.
Hong Kong has also entered this market recently, albeit with lukewarm investor response according to reports.
Crypto Spot ETPs Performance
The introduction of these products in the UK is expected to invigorate the market, particularly as US counterparts continue to attract substantial investments.
Data reveals that spot Bitcoin exchange-traded funds in the US have witnessed seven consecutive days of net inflows, with approximately $305 million flowing in, largely from products like BlackRock’s iShares Bitcoin Trust and Fidelity Wise Origin Bitcoin Fund.
Similarly, Ethereum ETFs launched in Hong Kong by ChinaAMC have seen notable inflows, hinting at growing investor interest, possibly driven by expectations of US approval for similar products.
Analysts Eric Balchunas and James Seyffart from Bloomberg have raised the likelihood of the US SEC approving Ethereum spot ETFs from 25% to 75%, indicating a potential shift in regulatory stance.
Furthermore, reports indicate the US SEC has asked exchanges to make adjustments to their 19b-4 applications.
In response, CboeBZX has submitted amended applications for several ETFs, including the Franklin Ethereum Trust, Fidelity Ethereum Fund, VanEck Ethereum Trust, Invesco Galaxy Ethereum ETF, and the ARK 21Shares Ethereum ETF.
Image from Unsplash, Chart from TradingView