London Stock Exchange embraces crypto launching Bitcoin & Ether ETNs

credit: Shutterstock
credit: Shutterstock

The London Stock Exchange (LSE) announced yesterday (25 March) that it will begin to allow trading of cryptocurrencies Bitcoin and Ether as exchange-traded notes (ETNs). 

Applications for Bitcoin and Ether ETNs will be open to potential issuers on 8 April 2024, and will be subject to approval by the Financial Conduct Authority (FCA), the agency presiding over crypto regulation and guidelines. 

The first day of market trading on the LSE for the crypto ETNs is scheduled for 28 May 2024, successful applicants will be able to invest and hold Bitcoin and Ether in a move not too dissimilar to that of the US Securities Exchange Commission (SEC) approving Bitcoin spot ETFs last January. 

An LSE statement read: “We have decided to launch the market in Crypto ETNs on 28 May 2024 to enable the maximum number of issuers to be present in the market on the first day of trading. 

“In choosing this date we have taken into consideration that we need to ensure that issuers meet the requirements for consideration detailed in the Crypto ETN factsheet and importantly, it will also enable those issuers planning on admitting securities on the launch date, time to prepare documentation to establish a Crypto ETN programme which will require a base prospectus to be approved by the FCA.”

The LSE also noted that interested applicants will need to submit their submissions by a 15 April 2024 deadline, which mandates a letter outlining how the issuer meets requirements for consideration under a crypto ETN factsheet. 

Crypto ETNs are linked to the value of the underlying cryptocurrency it represents, as in this case, the Bitcoin and Ether ETNs will be linked to their respective cryptocurrencies, handing outside and first-time investors an exposure to the changing value of the digital currencies. 

However, similar to crypto ETFs, the investor does not outright hold the cryptocurrency, enabling first-time investors additional security to a notoriously volatile market as it will be listed on a securities exchange. 

The launch of crypto ETNs in the UK will come as no surprise to many crypto enthusiasts in the country following the recent success of the Bitcoin ETF launch in the US, which helped Bitcoin surge to an all-time high of $71,000 over recent weeks. 

UK government officials, such as Prime Minister Rishi Sunak, have not been shy about exploring and adopting digital currencies and assets in the country’s wider financial landscape. 

Sunak spoke in April 2022, Chancellor of the Exchequer at the time, on ambitions to create the UK as a ‘global cryptoasset technology hub’ as the country has progressed with plans to regulate stablecoins and introduce blockchain technology such as digital sandboxes over recent years.