Yahoo Finance Bitcoin ETNs debut on London Stock Exchange
Bitcoin and ether exchange-traded notes (ETNs) have begun trading on the London Stock Exchange (LSE), opening the door to potentially make the UK the crypto hub of Europe, according to a 21Shares executive.
ETNs are traded and settled like regular shares and track the performance of underlying assets such as bitcoin or ether, similar to spot bitcoin exchange-traded funds (ETFs), which were approved by the US Securities and Exchange Commission (SEC) in January.
Yahoo Finance Future Focus spoke to Alex Pollak, head of UK for 21Shares, about the launch of bitcoin and ether ETN trading on the LSE, and what this could mean for the develop of the UK as a global crypto hub.
Read more: What are bitcoin ETNs?
Pollak stated that by approving the listing of bitcoin and ether ETNs on the LSE, the UK's Financial Conduct Authority (FCA) is attempting to gradually open up the crypto market in the UK.
"I think the fact that these products will now be available on the London Stock Exchange does show progress and I think within three years from now the UK will be home to the largest crypto exchange-traded fund market in Europe," Pollak added.
He said that in terms of significance, the listing of bitcoin and ether ETNs on the LSE represents a milestone in how UK investors can access crypto.
"From a 21Shares perspective I would add that, as the world’s largest issuer of crypto-backed ETPs with more than 40 products listed on 11 Exchanges, we’re proud to be part of this historic moment as we make our bitcoin and ether products available to UK investors in both GBP and USD," Pollak added.
However, the 21Shares executive stressed that Tuesday's bitcoin and ether ETN listing on the LSE will be for professional investors only. "But the game-changer in the UK will be when the retail ban is lifted, there is a retail ban on trading bitcoin and ether ETNs at the moment," he added.
FCA approval 'step in the right direction for UK'
Last week, a spokesperson for CryptoUK said they are pleased to see that the FCA has approved the applications of some providers to list physically-backed bitcoin and ether (ETH-USD) exchange-traded products on the LSE.
Read more: Crypto live prices
"The move is a step in the right direction for the UK, its equity markets and the government’s aspiration to secure Britain as a global crypto-asset hub. We would, however, reiterate that we would like to see more crypto-related instruments available to both institutional and retail investors in the UK. The country risks falling behind US equity markets, which have seen a surge in interest for bitcoin ETFs," CryptoUK added.
The UK as a global crypto hub
In April 2022, then-chancellor and current UK prime minister Rishi Sunak announced a plan to make the country a "global crypto hub". However, since then, the UK has lagged behind other jurisdictions, becoming one of the last major markets to resist the trading of crypto-related securities, despite the government's efforts to position the country as a potential centre for digital asset markets.
Read more: Bitcoin ETFs poised for US pension plan inflows, Standard Chartered analyst says
The SEC approved the first US-listed ETFs to track bitcoin (BTC-USD) in January. A spot bitcoin ETF is similar to London's ETN products, and investors anticipate both types of financial products could open the gateway for mainstream capital to flood the crypto market.
Currently, indications of traditional finance interest in digital assets in the US seem favourable, with fund managers such as BlackRock (BLK) and Franklin Templeton (BEN) increasing their allocations into the bitcoin via ETFs.
Watch: What is a spot bitcoin ETF and why it has sparked a crypto rally? | Future Focus
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