The London Stock Exchange will launch Bitcoin and Ethereum exchange-traded notes (ETNs) in May.
According to the official announcement, the London Stock Exchange (LSE) will start accepting applications for these products on April 8, with the approval set for May 28. The UK financial market regulator, the Financial Conduct Authority (FCA), will review the submitted applications.
Some crypto community members on X (Twitter) are optimistic that the launch of these products will trigger a bullish rally for Bitcoin.
Bitcoin has increased by 4.7% in the last 24 hours, reaching $70,246 at 09:42 EST. The London Stock Exchange’s announcement contributed to these gains.
London to Launch Crypto ETNs for Professional Investors
The LSE will only limit crypto ETNs to professional investors despite growing interest in these products in the retail market.
The FCA initially banned the sale of crypto derivatives and ETNs in a policy implemented in January 2021.
These crypto ETNs will only be denominated in Bitcoin and Ether. Cryptocurrencies will physically back them and have a reliable value of the underlying market price of these assets. An Anti-Money Laundering licensed custodian will hold the underlying assets in cold storage.
The LSE also said that standard admission timelines would not apply to crypto ETNs because of the nature of the underlying assets.
The exchange has asked interested issuers and advisers to reach out as soon as possible to discuss their proposals.
The recent plans to launch crypto ETNs come after the FCA said retail investors could not access them. Earlier this month, it affirmed its position, saying crypto ETNs would only launch if they remained solely available to professional investors.
Traditional Financial Institutions Pave the Way for Crypto
The LSE’s recent announcement follows the successful launch of spot Bitcoin exchange-traded funds (ETFs) in the US. Some of the biggest firms on Wall Street, including BlackRock and Fidelity, have listed spot Bitcoin ETFs and have managed to amass massive trading volumes for these products.
All eyes are also on the US Securities and Exchange Commission (SEC) to approve Spot Ether ETFs in May. BlackRock and Fidelity have also made applications for these products.
With the BlackRock and Fidelity Bitcoin ETFs leading by trading volumes and inflows, a similar trend will likely be seen in the UK as more traditional investors seek to diversify their portfolios with Bitcoin.
A similar trend is also being seen in Hong Kong, prepping the way for spot crypto ETFs.
Launching this product will add to the growing trend of traditional firms turning their focus towards the cryptocurrency market.
