The London Stock Exchange will start trading Bitcoin and Ethereum exchange-traded notes in May.
Starting April 8, the London Stock Exchange (LSE) will begin accepting listing applications for cryptocurrency exchange-traded notes (ETNs). The announcement follows the Exchange’s previous one and marks a significant milestone in integrating digital currencies into the U.K.’s financial market.
Following the applications in April, the LSE will start trading crypto ETNs on May 28, pending approval from the Financial Conduct Authority (FCA). The inclusion of Bitcoin and Ethereum ETNs aims to attract a wide array of issuers and investors, similar to what Bitcoin ETFs have achieved in the U.S. since January.
To ensure a smooth launch, the LSE has set deadlines for issuers intending to list their securities. By April 15, they must submit the necessary documentation, including a base prospectus for FCA approval.
Like Bitcoin ETFs, ETNs are traded on a stock exchange, offering a more accessible and regulated way for investors to gain exposure to the crypto market. The critical difference between ETNs and Exchange-Traded Funds (ETFs) is the structure.
ETNs are unsecured debt securities backed by the issuer’s credit, whereas ETFs are funds that hold the actual assets they track, offering direct exposure. This means that ETNs carry a credit risk that ETFs do not, as the value of an ETN depends on the issuer’s ability to pay, while ETFs’ values are directly tied to the assets they own.
