Bitcoin ETPs Hit London Stock Exchange in Debut

Bitcoin ETPs hit the trading ground on the London Stock Exchange. The launch is a significant step in the adoption of Bitcoin and London’s goal to become a global hub for digital assets. 

Bitcoin ETPs from WisdomTree and 21Shares have gone live on the London Stock Exchange, becoming the first regulated Bitcoin ETPs in the UK market. The move follows the FCA's recent green light for Bitcoin exchange-traded notes (ETNs) to be listed on the exchange.  

21Shares has launched two specific products: the(A 21Shares Bitcoin ETN BTC) and the 21Shares Bitcoin Core ETN (CBTC), as well as WisdomTree’s Physical Bitcoin ETN (BTCW). These ETNs provide a regulated means for professional investors to invest in the value of Bitcoin (BTC).  

Alex Pollak, the head of 21Shares UK, pointed at the market’s potential growth, stating that the market could see significant changes once the current retail limitations on Bitcoin and Ether ETNs trading are removed.  

"But the game-changer in the UK will be when the retail ban is lifted; there is a retail ban on trading bitcoin and ether ETNs at the moment", he said.

 The launch is a massive step in the adoption of Bitcoin and London’s goal to become a global hub for digital assets. Other global financial centres, such as the US, Europe, and Hong Kong, have already approved it. Ophelia Snyder, co-founder of 21Shares, said that the UK plays a significant role in their plans, acknowledging that it is one of the world's deepest and most liquid capital markets.  

FCA’s approach of gradually integrating the crypto market into its regulatory perimeter includes this listing, enabling regulated exposure of crypto assets in the London Stock Exchange to professional investors for the first time.  

What Are Spot Bitcoin Exchange Traded Products (ETPs)?

Spot bitcoin ETPs are different from other traded bitcoin products, mainly from bitcoin futures, as the actual bitcoin is the underlying asset of the spot bitcoin ETPs, which gives direct exposure to the asset price.  

Bitcoin ETPs, which, unlike ETFs, are not regulated by the UK’s Investment Company Act of 1940 and are thus not restricted in terms of diversification and regulation. This enables them to be more versatile regarding the assets they can offer.  

Buying Bitcoin Directly vs. Buying Spot Bitcoin ETPs

If you are still undecided whether to buy Bitcoin directly or a spot Bitcoin ETP, it is simply a matter of choosing between utility and ease of use. Direct purchases of Bitcoin provide full access to the functions provided by the creator, Satoshi Nakamoto. Still, it is necessary to study the specific features of managing and protecting cryptocurrencies in more detail.  

However, buying a spot Bitcoin ETP is convenient if you are not interested in managing the investment. It is a direct way of investing in the crypto market without the need to understand the underlying technology, but this has its disadvantages of being centralised and some functional constraints.   

Finally, it is worth noting that regardless of the above-discussed cryptocurrency investment, the investor should be aware of risks such as fluctuation and market manipulation. This is because cryptocurrencies, unlike other securities, do not have the same regulatory backing of the Federal Deposit Insurance Corporation; hence, they can often be high risk.