London Stock Exchange set to introduce Bitcoin and Ethereum ETNs for listing commencing in May
In May, the London Stock Exchange (LSE) will commence trading exchange-traded notes (ETNs) for Bitcoin and Ethereum. The LSE will begin accepting applications for listing these cryptocurrency ETNs on April 8, which signifies a significant step towards integrating digital currencies into the UK’s financial market. Pending approval from the Financial Conduct Authority (FCA), the trading of crypto ETNs will commence on May 28. The aim of including Bitcoin and Ethereum ETNs is to attract a diverse range of issuers and investors, similar to the success that Bitcoin ETFs have achieved in the US since January.
To ensure a seamless launch, the LSE has established deadlines for issuers who wish to list their securities. By April 15, they must submit the necessary documentation, including a base prospectus for FCA approval.
ETNs, like Bitcoin ETFs, are traded on a stock exchange, providing investors with a more accessible and regulated avenue to enter the crypto market. The key distinction between ETNs and Exchange-Traded Funds (ETFs) lies in their structure. ETNs are unsecured debt securities that rely on the creditworthiness of the issuer, whereas ETFs hold the actual assets they track, providing direct exposure. Consequently, ETNs carry a credit risk that ETFs do not, as the value of an ETN depends on the issuer’s ability to pay, whereas ETFs’ values are directly linked to the assets they possess.
