London Stock Exchange to Launch Bitcoin ETN Trading

In the second quarter of 2024, the London Stock Exchange (LSE) will begin accepting applications for the listing of exchange-traded notes (ETN) based on Bitcoin and Ethereum.

The company outlined the requirements for crypto products in an information bulletin. These include:

• physical backing of assets without debt obligations;
• the presence of market valuation and other necessary metrics;
• use of cold storage or their equivalents (in this case, third-party auditing is required);
• the custodial partner must be regulated by AML rules in the UK or EU;
• the underlying assets can only be Bitcoin and Ethereum.

LSE reminded that according to the decision of the FCA, since January 6, 2021, crypto-ETNs are available only to professional investors.

“To reduce the risk of approval schedule delays, the exchange encourages early engagement of potential issuers interested in admitting crypto-ETNs to trading,” the platform warned.

LSE added that due to the “nature of the product,” standard listing review timelines on the exchange do not apply. Additionally, applicants must discuss their application with the FCA.

As of early February, Europe dominated the global market for exchange-traded Ethereum products with a share of about 65% and assets under management of $4.6 billion, according to CoinGecko.

However, experts found that just a month after the launch in January of spot Bitcoin ETFs in the US, the country captured 83.3% of the global segment volume of $41.74 billion. Several applications for the approval of similar funds based on Ether are under review by the SEC. Despite discussions by potential product issuers with the regulator, optimism regarding their swift approval in May is waning.

Chainalysis assessed the UK’s crypto economy as the largest in Europe and the third largest in the world, with an annual transaction volume of $252 billion.