Bitcoin and Ethereum debuted on the London Stock Exchange: What are the expectations?
Key facts:
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On the first day, only instruments issued by the firm 21Shares were quoted.
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The London Stock Exchange currently manages assets of $4.3 trillion.
The London Stock Exchange (LSE) gave them Welcome to the notes listed on the financial market (ETN) based on bitcoin (BTC) and ether (ETH), the native cryptocurrency of the Ethereum network.
This fact follows the approval that these financial instruments received from the Financial Conduct Authority (FCA).
In this context, the official X account of the LSE communicated: “We are pleased to announce the launch of cryptocurrency ETNs on the London Stock Exchange, starting May 28, 2024, welcoming products from WisdomTree and 21Shares ”.
However, during the first day, only eight ETNs issued by the Swiss firm 21Shares were listed. The founders of the firm highlighted that The inclusion of cryptocurrencies to the LSE can contribute to the general maturity of the digital currency ecosystem.
“The UK is one of the most liquid capital markets in the world. “As institutional interest in cryptocurrencies grows, it is only natural that the London Stock Exchange will host responsible and properly constructed funds that offer access to these markets.”
Ophelia Snyder, co-founder of 21Shares
For his part, Hany Rashwan, another co-founder of the company, said: “Cryptocurrencies are here to stay. There is a clear role for decentralized finance in a global world, and more and more people are coming to that conclusion. “More and more institutional investors want exposure to the transformative potential of cryptocurrencies, as part of a balanced investment portfolio.”
It is important to note that the British stock exchange, founded in 1801, It is one of the main ones globally and a It has a market capitalization of 4.3 trillion dollars.
Considering that these products are only available to professional investors, Bloomberg analyst Emily Nicole does not believe there will be any major market movements.
“I spoke to several investors and many have told me that they do not expect any of their clients to move their holdings from Europe to London because, precisely, they are professionals. This is what they do. That is why we do not expect to see many flows towards these products. But this is a stepping stone and if these things develop smoothly and have some kind of demand, perhaps this will give them reasons for retail investors to enter,” he explained.
As Criptonoticias already reported, the FCA prohibited the sale of BTC derivatives and other cryptocurrencies to retail consumers or individual clients who wish to invest.
What characteristics do ETNs have?
ETNs are a type of investment funds that replicate the price of an underlying asset, in this case, it is bitcoin and ether. These debt notes are characterized by being freely traded, just like a stock.
As explained in the Cryptopedia (educational section of CriptoNoticias), unlike BTC ETFs, these products have an expiration date which is when they are settled on the stock market. This date cannot be extended and traders only have the right to trade the ETNs within that period. In addition, they are backed by debt acquired by the issuer.
