- The London Stock Exchange (LSE) announced that it will begin accepting applications for Bitcoin (BTC) and Ethereum (ETH) exchange-traded notes (ETNs) by the second quarter of the year.
- The crypto ETNs will only be available for institutional investors.
- Spot Bitcoin exchange-traded funds (ETFs) in the US showed signs of recovery with half-a-billion net inflows the same day its underlying asset reached a new all-time high.
Bitcoin and Ethereum ETNs in LSE
In yet another milestone for the cryptocurrency community, the UK’s Financial Conduct Authority (FCA) declared via a press release on Monday that it will not get in the way of requests for crypto ETNs (cETNs) and crypto derivatives by Recognized Investment Exchanges (RIEs). Following this, the LSE stated that it will start accepting Bitcoin and Ethereum ETNs by Q2.
There are, however, some conditions set by the FCA for the crypto ETN filings to safeguard investors. Besides coming from UK RIEs and having structured controls in place, the investment instrument should only be limited to institutional or professional investors such as investment and credit firms. This is in line with the ban on retail consumers’ participation in regulated crypto exchanges imposed in 2020.
The regulator warned, “cETNs and crypto derivatives are ill-suited for retail consumers due to the harm they pose.” It goes on to remind people about the risks that crypto assets pose, saying, “Those who invest should be prepared to lose all their money.”
As an assurance of its commitment to protecting public interest, the FCA assured that it is partnering up with government, international, and industry partners to forge better standards in the UK’s regulatory regime.
Meanwhile, the LSE listing is only limited to Bitcoin and Ethereum ETNs. It also comes with the condition that they should be physically backed and non-leveraged.
“The decision by the FCA and the LSE to accept crypto ETP applications signals a very encouraging shift in the regulatory landscape in the UK,” said Mandy Chiu, 21Shares head of financial product development in an interview.
Bitcoin ETFs Achieve Half a Billion Net Inflows
On the other side of the globe, spot Bitcoin ETFs have rallied after their underlying asset, BTC, achieved another all-time high at $72,850.71. Based on the March 11 tally, the total net inflows in the sector was at $505.6 million.
Leading the charge were BlackRock’s IBIT with $562.9 million and Fidelity’s FBTC with $215.5 million net inflows. Large withdrawals from Grayscale’s GBTC were the major deal-breaker during the last trading day with around $494.1 million leaving its coffers.