Securities based on Bitcoin and Ethereum, the two largest cryptocurrencies, will be tradable on the London Stock Exchange from 28 May, subject to regulatory approval.
The LSE announced on 11 March that it would accept applications for Bitcoin and Ethereum exchange traded notes (ETNs) in the second quarter of 2024 – the date has been set for 8 April 2024, giving it time to scrutinise the paperwork ahead of the trading launch the following month.
ETNs track the performance of an underlying asset – in this case the individual crypto tokens. They are similar to exchange-traded funds (ETFs) and are traded in the same way as normal shares.
The price of Bitcoin has soared in 2024 with the approach of its four-yearly ‘halving’ process, which sees the rewards given to those who ‘mine’ new coins reduce (you can read more about that here). Bitcoin’s price topped £57,000 earlier this month, having stood at around £35,000 at the beginning of the year.
Ethereum was valued at around £1,800 in January and is now trading at around £2,900.
In a statement, LSE said: “We have decided to launch the market in Crypto ETNs on 28 May 2024 to enable the maximum number of issuers to be present in the market on the first day of trading.
“In choosing this date we have taken into consideration that we need to ensure that issuers meet the requirements for consideration detailed in the Crypto ETN factsheet and importantly, it will also enable those issuers planning on admitting securities on the launch date, time to prepare documentation to establish a Crypto ETN programme which will require a base prospectus to be approved by the Financial Conduct Authority.”
To participate on 28 May, applications must be submitted by 15 April and given the green light by the FCA by 22 May.
Cryptocurrency trading in any form remains highly controversial because of the inherent volatility of the price of the underlying assets. The FCA has frequently warned investors that they risk losing all their money when investing in this sector.