Bitcoin and Ethereum ETNs listed on London Stock Exchange

The London Stock Exchange (LSE) has begun trading Bitcoin (BTC) and Ethereum (ETH) exchange-traded notes (ETNs), potentially paving the way for the UK to become Europe’s crypto hub, according to Alex Pollak, head of UK for 21Shares.

According to today’s Yahoo Finance report, the ETNs are traded and settled like regular shares and track the performance of underlying assets such as Bitcoin or Ethereum, similar to spot Bitcoin exchange-traded funds (ETFs) approved by the US Securities and Exchange Commission (SEC) in January. Pollak said:

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.

The listing of Bitcoin and Ethereum ETNs on the LSE represents a milestone in how UK investors can access crypto, according to Pollak. He explained:

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 Ethereum products available to UK investors in both GBP and USD.

However, Pollak stressed that Tuesday’s Bitcoin and Ethereum ETN listing on the LSE will be for professional investors only, as there is currently a retail ban on trading Bitcoin and Ethereum ETNs in the UK. He believes that lifting this retail ban will be a game-changer for the UK’s crypto market.

CryptoUK, a trade body representing the digital asset sector, is pleased to see that the FCA has approved the applications of some providers to list physically-backed Bitcoin and Ethereum ETPs on the LSE. A spokesperson said:

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.

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 center for digital asset markets.

The SEC approved the first US-listed spot Bitcoin ETFs in January, and investors anticipate that both ETNs and ETFs could open the gateway for mainstream capital to flood the crypto market. Earlier this month, Bitcoin and Ethereum spot ETFs were also launched on the Hong Kong stock exchange.

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