The United Kingdom’s Financial Conduct Authority (FCA) has granted approval for Bitcoin and Ethereum-based exchange-traded products (ETPs) to be listed on the London Stock Exchange (LSE). This move marks the debut of crypto ETPs on the LSE and is expected to take place on May 28, as reported by ETF Stream.
The WisdomTree Physical Bitcoin ETP and the WisdomTree Physical Ethereum ETP will be among the first crypto ETPs available in the U.K. However, these ETPs will only be accessible to professional and institutional investors due to the ban on retail customers trading crypto derivatives that was implemented in 2021. The listing of these two ETPs by WisdomTree comes nearly two months after the LSE’s public notice.
Alexis Marinof, head of Europe at WisdomTree, expressed that the FCA’s approval of their crypto ETPs’ prospectus will simplify the process for U.K.-based professional investors to invest in crypto-backed products. Currently, these investors can only access crypto ETPs through overseas exchanges.
In a public announcement made on March 25, the LSE declared that applications for cryptocurrency ETPs would be accepted until April 8. The approved funds would then be listed in May, pending clearance by the FCA.
To receive FCA approval, crypto ETPs must be denominated in Bitcoin (BTC) or Ether (ETH), be physically backed, and be non-leveraged. The issuers are also required to collaborate with an Anti-Money Laundering licensed custodian in the United States, the U.K., or the European Union, and hold the underlying assets in cold storage.
The success of spot Bitcoin ETFs in the U.S., following approval from the U.S. Securities and Exchange Commission, has led to significant interest from other governments worldwide in offering crypto accessibility to investors. Hong Kong, for example, has recently approved the listing of spot Bitcoin and Ether ETFs. Unlike their U.S. counterparts, these Hong Kong ETFs allow in-kind transfers and can be denominated in three fiat currencies. Investors have the ability to instantly purchase and redeem ETF units using Bitcoin or Ether.
However, despite the improved accessibility provided by these ETFs, they have not achieved the same level of impact as the U.S.-based Bitcoin ETFs. On their first trading day, they only attracted $22.5 million in investments.
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