From the 28th of May 2024, the London Stock Exchange will list crypto spot ETFs for trading. Individuals can now buy and sell Bitcoin and Ethereum ETNs like regular shares. This comes almost a week after the UK government gave two companies approval to offers these products to investors.
However, there are still certain underlying issues that remain unchanged. This article will explain this new development and the UK government’s future plans.
On the 22nd of May 2024, Coindesk reported that the Financial Conduct Authority gave WisdomTree and 21Shares permission to offer Bitcoin and Ethereum products for trading. Following this approval, professional investors can now trade crypto-ETF on the LSE.
Meanwhile, Invesco also received a go ahead to offer these services. However, it remains unknown when and if it will do so. While the timeline is not exactly clear, this firm stated that it will be offering 240 million worth of Physical bitcoin ETPs. Furthermore, the American Investment company is rumored to set its fee at 0.39%.
The London Stock Exchange will list crypto spot ETFs on the 28th of May. Furthermore, the FCA will begin tracking the performance of Bitcoin and Ethereum. UK’s government wants to be the global crypto hub. Hence, its decision to make bitcoin and Ethereum ETFs publicly tradable for professionals. The regulatory authority has also stated that it will welcome requests from other asset management firms to offer trading services to professionals.
Following the confirmation of the LSE listing, WisdomTree stated that it will charge 35 basis points as the fees for using its products. This means that individuals will a meager 0.35% in fees when trading with this company. On the other hand, there is no official words yet from 21Shares regarding its charges.
According to WisdomTree, it is charging very low asset management fees because it intends to remove the entry barriers.
Having the London Stock Exchange list crypto spot ETFs is a significant achievement and continues a good run for the blockchain sector. Recall that the US stock exchange approved crypto-related ETPs early in January. This was followed by the Hong Kong conditional Bitcoin approval a few weeks ago.
While the London Stock Exchange will list crypto spot ETFs for trading, the UK government is not reversing its ban from 2020. According to the Financial Conduct Authority, these products will only be available to professional traders. in other words, retail investors cannot trade Bitcoin or Ethreum ETPs.
It remains unclear why the ban on retail investors remain, considering that the United Kingdom intends to become a global crypto hub. There is still no official statement from the FCA regarding this decision.
For those who do not understand, retail investors are the average person who trades and invests small amounts in cryptocurrencies. These persons may not have a significant portfolio like a day trader. What makes this decision questionable is that cryptocurrencies was designed to remove barriers.
Furthermore, the United Kingdom is still maintaining its decision to tax crypto traders. Anyone who makes capital gains on more than £6,000 will pay 10% or 20% of their profit as tax. Those who make more than this amount as profit can pay up to 45% in tax. In simple terms, the government is collecting half of your profit.
