UK Makes Major Move Into Crypto

The initial batch of crypto exchange-traded products (ETPs) has received official approval from the Financial Conduct Authority (FCA) of the UK

This milestone signifies a substantial progression in integrating digital assets into the financial framework of the nation.

By adopting this strategy, the United Kingdom will align with international financial hubs that have already adopted trading these digital assets.

Comparative Analysis of International Regulations

WisdomTree Inc. declared that the FCA had authorized the London Stock Exchange to list two physically backed cryptocurrency ETPs that monitor Bitcoin and Ethereum.

Bloomberg has reported that the trading of these products is scheduled to commence on May 28th, indicating a swift advancement from the stage of regulatory sanction to the point of market availability.

In the United Kingdom, additional issuers, including ETC Group, 21Shares, and CoinShares, have submitted applications to list their cryptocurrency products, complementing the initiative of WisdomTree.

Although these products will directly store Bitcoin and Ethereum, access to them will be restricted to “professional investors” in accordance with FCA regulations.

In contrast to the United States, where recent Bitcoin ETF approvals have accumulated approximately $59 billion in assets—a figure considerably higher than the sum for comparable products in Europe—this stance is comparatively more stringent.

ETPs in cryptocurrencies have been offered on multiple European stock exchanges internationally for years. Significant progress has been made in the United States regarding these products, particularly since January, when the Securities and Exchange Commission (SEC) granted approvals that contributed to Bitcoin reaching all-time highs.

Bloomberg reports that investors’ reaction in Hong Kong, which has even more recently entered this market, has been “tepid.”
Crypto Spot ETFs’ Performance

It is anticipated that introducing these products in the United Kingdom will further stimulate the market, especially since comparable products in the United States continue to attract substantial inflows.

Seven days in a row, spot Bitcoin exchange-traded funds in the United States experienced net inflows of approximately $305 million, with BlackRock’s iShares Bitcoin Trust and Fidelity Wise Origin Bitcoin Fund making substantial contributions.

Moreover, significant inflows have been observed in Hong Kong for the Ethereum ETFs that ChinaAMC recently introduced, indicating a growing interest among investors in these products. Speculation regarding the potential US approval of comparable ETF products propels this upward trend.

In recent times, Bloomberg analysts James Seyffart and Eric Balchunas have raised the projected likelihood that the US SEC will sanction Ethereum spot ETFs from 25% to 75%, suggesting a possible change in regulatory perspectives.

This follows reports that exchanges have been requested to amend their 19b-4 applications by the US Securities and Exchange Commission.