UK makes big move into cryptocurrency: first exchange-traded product is about to launch

The United Kingdom’s Financial Conduct Authority (FCA) has officially approved the first batch of cryptocurrency exchange-traded products (ETPs), marking an important development in integrating digital assets into the country’s financial landscape.

The move brings the UK into line with global financial centers that have embraced trading in this suite of digital assets.

Regulatory background and international comparison

WisdomTree has announced that it has received approval from the FCA to list two physically-backed crypto ETPs tracking Bitcoin and Ethereum on the London Stock Exchange.

The products are scheduled to begin trading on May 28, according to Bloomberg, underscoring the rapid progress from regulatory approval to market availability.

WisdomTree’s move is part of a wider trend in which other issuers, such as ETC Group, 21Shares and CoinShares, have also applied to list their crypto products in the UK.

While the products will directly hold Bitcoin and Ethereum, they will only be open to “professional investors” under FCA regulations.

This approach is more stringent than in the United States, where recently approved Bitcoin ETFs have seen total assets in these funds reach approximately $59 billion, well above the total of similar products in Europe.

Internationally, cryptocurrency ETPs have been listed on several European stock exchanges for many years. The U.S. has had considerable success with these products, especially following the Securities and Exchange Commission’s (SEC) approval in January, which helped propel Bitcoin to all-time highs.

Hong Kong has also recently entered the market, although the response from investors has been rather "cold", according to Bloomberg.

Crypto Spot ETF Performance

The launch of these products in the UK is expected to further energize the market, particularly as similar products in the US continue to experience strong inflows.

Data showed that spot Bitcoin exchange-traded funds in the United States experienced net inflows for the seventh consecutive day, with approximately $305 million flowing into these products, with BlackRock’s iShares Bitcoin Trust and Fidelity Wise Origin Bitcoin Fund contributing significantly.

Meanwhile, in Hong Kong, China AMC’s recently launched Ethereum ETF has also seen significant inflows, indicating growing investor interest in these products. This positive flow appears to be driven by speculation surrounding the potential approval of similar ETF products in the United States.

Bloomberg analysts Eric Balchunas and James Seyffart recently raised the likelihood of the U.S. SEC approving an Ethereum spot ETF from 25% to 75%, indicating a potential shift in regulatory attitudes.

It was previously reported that the U.S. Securities and Exchange Commission has asked exchanges to modify their 19b-4 applications.

In response, CboeBZX has so far submitted revised applications for several ETFs, including the Franklin Ethereum Trust, Fidelity Ethereum Fund, VanEck Ethereum Trust, Invesco Galaxy Ethereum ETF, and ARK 21Shares Ethereum ETF.

Conclusion:

The first batch of cryptocurrency ETPs approved by the British Financial Conduct Authority (FCA) not only represents a milestone in innovation in the British financial market, but also reflects its leading position in the global financial technology field. With the launch of Bitcoin and Ethereum ETPs on the London Stock Exchange, the UK market is expected to see a new wave of energy, echoing strong inflows into the US market.

Although there are restrictions on investor access, this move by the UK heralds the wider integration of cryptocurrency products into mainstream financial markets, providing more choices for global investors, while promoting further cryptocurrency regulation and market practices. Mature.

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