TL;DR
- FCA Approves WisdomTree’s Crypto ETPs: The UK’s Financial Conduct Authority has authorized WisdomTree to list Bitcoin and Ethereum exchange-traded products on the London Stock Exchange, marking a significant advancement for cryptocurrency in mainstream finance.
- Cost-Effective Institutional Crypto Products: With a low management expense ratio, these ETPs are set to be some of the most economical institutional-grade cryptocurrency offerings in Europe, available for trading to professional investors starting May 28.
- Continued Exclusion of Retail Investors: Despite this progressive step, the FCA maintains its stance on protecting retail investors by continuing the ban on the sale of crypto asset-backed ETNs and derivatives to non-professional consumers.
In a landmark decision, the Financial Conduct Authority (FCA) has given the nod to WisdomTree, an asset management firm, to list its Bitcoin and Ethereum exchange-traded products (ETPs) on the London Stock Exchange (LSE). This move marks a significant milestone for the cryptocurrency industry and WisdomTree alike.
A Leap Forward for Crypto in Traditional Finance
The approved ETPs, which boast a competitive management expense ratio of just 35 basis points, are set to enhance the legitimacy of cryptocurrencies within the traditional finance sector. These products are among the most cost-effective institutional-grade cryptocurrency offerings in Europe.
WisdomTree ETPs Set to Trade in Six Days
Starting May 28, WisdomTree’s Physical Bitcoin (BTCW) and Physical Ethereum (ETHW) will be available for trading, exclusively targeting professional investors.
Alexis Marinof, the Head of Europe at WisdomTree, views the FCA’s approval as a pivotal moment that could pave the way for increased institutional adoption of cryptocurrencies.
The regulatory green light is expected to lower the barriers that have prevented professional investors from accessing the crypto market due to regulatory constraints and uncertainties.
WisdomTree’s Foray into Crypto-Backed Instruments
WisdomTree is no stranger to the world of cryptocurrency-backed financial instruments. In 2019, the company was the first to introduce physically-backed Bitcoin ETPs to European investors.
Today, WisdomTree’s portfolio has grown to include eight different crypto ETPs, offering direct price exposure to major cryptocurrencies like Bitcoin and Ethereum, as well as a basket of other digital assets.
FCA’s Stance on Retail Investors
While the FCA has opened doors for professional investors, it maintains strict guidelines that exclude retail investors from engaging with these high-risk crypto products.
The authority continues to enforce a ban on the sale of crypto asset-backed ETNs and cryptocurrency derivatives to non-professional consumers, citing suitability concerns.
Expanding Horizons
The FCA’s latest move is in line with its statements back in March, showing a readiness to entertain ETP listings from financial institutions aimed at professional investors. This development is indicative of a broader trend towards integrating cryptocurrency into formal financial markets.
The LSE has also expressed its willingness to consider applications for Bitcoin and Ethereum-based products starting this quarter.
WisdomTree’s crypto ETPs are already listed on several prominent European exchanges, including Deutsche Börse Xetra, the Swiss Stock Exchange SIX, and Euronext exchanges in Paris and Amsterdam. This widespread listing underscores the growing acceptance and institutionalization of cryptocurrencies.
