First UK crypto ETPs to launch on May 28

Financial Times

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The UK’s first cryptocurrency exchange traded products are finally set to begin trading next week, almost a decade after the first such vehicles appeared in Sweden.

WisdomTree and 21Shares have been given the green light by the Financial Conduct Authority, the City regulator, to list ETPs investing in “physical” spot bitcoin and ether, the two most popular digital tokens, on the London Stock Exchange on May 28.

However, the ETPs — which form part of a barrage of similar vehicles expected to list on the LSE — will only be available to professional investors because the FCA has ruled that “crypto derivatives are ill-suited for retail consumers due to the harm they pose”.

The stance is in sharp contrast to stock exchanges across much of continental Europe, as well as Australia, Brazil, Canada, Hong Kong and the US, which offer crypto ETPs to both retail and institutional investors.

US-listed spot bitcoin ETFs already boast combined assets of $50bn, despite only launching in January, with about 80 per cent of this held by retail investors, according to regulatory filings.  

A series of other crypto ETP managers, including ETC Group and CoinShares, are known to have filed to list vehicles on the LSE, ideally also on May 28 if they receive regulatory sign-off from the FCA in time.

“The 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, head of Europe at WisdomTree, which has $111bn under management globally.

“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. FCA approval in this respect 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,” he added.

WisdomTree’s Physical Bitcoin (BTCW) and Physical Ethereum (ETHW) ETPs will have fees of 0.35 per cent, the same as equivalent vehicles listed in a number of continental European exchanges.

Ophelia Snyder, co-founder of 21 Shares, which will cross-list its existing Bitcoin and Ethereum Staking ETPs in the UK, with fees of 1.49

The full article is available here. This article was published at FT Markets.