WisdomTree, a New York-based ETF and ETP firm, has been approved by the British FCA to list physically backed Bitcoin and Ethereum ETPs on the London Stock Exchnage (LSE). Alexis Marinof, the head of Europe at WisdomTree, pointed this out on May 22. He referred to the FCA’s approval as a significant event in the industry in the U.K. and the growth and legitimisation of cryptocurrency investments in the region.
Similarly, when the FCA approves these ETPs, it also sets certain measures to ensure that these ETPs are not easily manipulated. To satisfy these criteria the ETPs must be linked to Bitcoin or Ether, physically replicated and non-contracted in order to provide a safe investment opportunity for the sophisticated client base.
Issuers are also required to employ the services of a custodian licensed under AML in the United States, the United Kingdom, or the European Union. Such custodians should keep the base assets in cold storage to prevent investors from incurring potential losses.
The current ETPs that have been approved in WisdomTree are the Physical Bitcoin (BTCW) and Physical Ethereum (ETHW), with a fee of 0.35%. This makes them useful and cheap financial instruments that can be used by professional traders; that is why WisdomTree is one of the key players in the developing market of cryptocurrencies.
This approval comes after the FCA made an announcement in March regarding its stance that it had no problems with Bitcoin ETP for a professional client. This was a significant shift in the stance of the regulators, which signaled that the authorities have begun to recognize the prospects of legal cryptocurrencies.
WisdomTree, based in New York, has more than $111 billion in AUM and has been offering linked crypto products since the early days. In the USA, WisdomTree Bitcoin Fund was among the first to get approval for a spot Bitcoin ETF in January of this year, which proves the company’s expertise and progress in crypto investments.
The FCA banned these offerings in 2020 because of the risks it introduces to investors and the market. Nevertheless, the emergence of the Bitcoin spot ETFs in stable markets such as the United States and Hong Kong has put pressure on the global authorities to reconsider their position.
The recent decision to allow WisdomTree to list Bitcoin and Ethereum ETPs on the LSE is a positive development. This creates the potential for similar products to be included in traditional financial markets and sets the groundwork for the sector to grow and develop further.
