WisdomTree, a prominent asset management firm, has received approval from the Financial Conduct Authority (FCA) to list exchange-traded products (ETPs) on the London Stock Exchange (LSE). This approval positions WisdomTree as one of the initial companies to have its prospectus sanctioned by the UK regulator.
When Will Trading Start?
The approved ETPs, namely Physical Bitcoin (BTCW) and Physical Ethereum (ETHW), are set to commence trading on May 28. These products will be exclusively accessible to professional investors and will incur a fund management fee of 35 basis points. This move signifies a substantial milestone for WisdomTree as it broadens its cryptocurrency offerings to the UK market.
What Prompted the FCA’s Policy Shift?
WisdomTree, based in New York and managing over $111 billion globally, has been offering cryptocurrency products across European exchanges since 2019. Earlier this year, the firm’s Bitcoin Fund (BTCW) became one of the first to receive approval for a spot Bitcoin ETF in the US. This latest venture aligns with recent policy changes by the FCA, signaling a notable shift in regulatory attitudes.
In March, the FCA announced that it would permit applications from financial institutions seeking to list ETPs for professional investors. This marked a departure from its previous stance, which saw a ban on crypto derivative products, including ETPs, in January 2020. Subsequently, the LSE confirmed it would accept applications for Bitcoin (BTC) and Ethereum (ETH) investment products in Q2, facilitating WisdomTree’s entry.
Concrete Implications for Investors
Key Takeaways for Investors:
- Professional investors can access regulated cryptocurrency investments on the London Stock Exchange.
- The fund management fee for these ETPs is competitively set at 35 basis points.
- The FCA’s policy change indicates growing regulatory acceptance of cryptocurrency investment products.
- Individual investors remain restricted from participating in these ETPs to mitigate broader market risks.
The FCA’s relaxed stance followed observations of similar products in Europe and the approval of spot Bitcoin ETFs in the US. Despite easing restrictions for professional investors, the regulator continues to ban these products for individual investors, underscoring a cautious approach to market risk management. This decision enables professional investors to engage in regulated cryptocurrency investments on the LSE while safeguarding individual investors from potential high volatility and market manipulation.
