Bitcoin ETNs debut in London, paving way for UK to become Europe's crypto hub, says 21Shares | Future Focus

On this episode of Yahoo Finance Future Focus, our host Brian McGleenon speaks with Alex Pollak, head of UK for 21Shares, about the current investor appetite for bitcoin exchange-traded funds in the US and Hong Kong, as well as the debut of bitcoin and ether exchange-traded notes (ETNs) on the London Stock Exchange (LSE).

Bitcoin exchange-traded notes (ETNs) have made their debut on the London Stock Exchange (LSE), potentially paving the way for the UK to become a leading crypto hub in Europe, according to 21Shares.

The listing of bitcoin and ether ETNs on the LSE marks a significant development in the UK's crypto market, which has been gradually opening up to digital assets under the Financial Conduct Authority's (FCA) phased approach.

“The listing of bitcoin and ether ETNs on the London Stock Exchange is a major development for the UK’s crypto market,” Alex Pollak, head of UK for 21Shares, told Yahoo Finance UK.

“It comes as the FCA is gradually opening up the market to digital assets, having banned mass-market marketing of crypto products last year.”

The new ETNs, which are available to trade on the LSE from Monday, will track the price of bitcoin (BTC-USD) and ether (ETH-USD) respectively.

The bitcoin ETN will trade under the ticker code 'CBTC' and the ether ETN will trade under the ticker code 'CETH'.

Both ETNs will be available in sterling, US dollar, and euro denominations, and will be fully collateralised by the underlying cryptocurrency, held by Standard Chartered Bank (SCBFF) in the UK.

The launch of bitcoin and ether ETNs on the LSE follows the debut of a crypto basket ETN by 21Shares on the exchange earlier this year.

The listing of bitcoin and ether ETNs in London could mark a significant step towards establishing the UK as a leading crypto hub in Europe.

The UK government has expressed its ambition to make the country a global centre for digital assets, and the FCA's phased approach to opening the crypto market is designed to strike a balance between protecting consumers and fostering innovation.

“The UK has the potential to become a leading crypto hub in Europe, and the listing of bitcoin and ether ETNs on the LSE is a key step in that direction,” said Pollak.

“It will make it easier for investors in the UK to gain exposure to digital assets, and it will also help to legitimise cryptocurrencies in the eyes of mainstream investors.”

However, Pollak notes that the new ETNs are currently accessible only to professional investors, as defined by the FCA.

“The ETNs will be available to trade on the LSE's Main Market, which means that they will be accessible only to professional investors,” he said.

“The vast majority of individual investors in the UK will not be able to trade these ETNs directly.”

He adds that lifting the ban on mass-market marketing of crypto products in the UK would be a "game-changer" for the market.

“The game-changer in the UK will be when the retail ban is lifted,” said Pollak.

“At the moment, only professional investors can access these products, but if the FCA decides to open the market up to retail investors, it will make a huge difference to the size and growth of the market.”

The launch of bitcoin and ether ETNs on the LSE is a significant development for the UK's crypto market, and it could pave the way for the country to become a leading crypto hub in Europe.

However, broader access to these products is essential for the market to reach its full potential in the UK.