As cryptocurrency enthusiasts eagerly await the approval of a U.S. physically-backed ethereum (ETH) exchange-traded fund (ETF), there has been a breakthrough development in London.

The UK's Financial Conduct Authority (FCA) has approved two cryptocurrency exchange-traded products (ETPs) from WisdomTree, which will soon be listed on the London Stock Exchange (LSE).

WisdomTree Becomes First UK Cryptocurrency ETP Issuer

WisdomTree, a global issuer of exchange-traded products and funds with nearly $112 billion in assets under management, announced Wednesday that it has received FCA approval to launch two new instruments on the London Stock Exchange: the WisdomTree Physical Bitcoin (BTCW) and the WisdomTree Physical Ether (ETHW).

These physically-backed ETPs are expected to launch next week (May 28, 2024) and will initially be available only to professional investors, but could potentially reach retail investors in the future.

Alexis Marinof, Head of Europe at WisdomTree, commented, “While professional investors in the UK are already able to allocate cryptocurrency ETPs via overseas exchanges, they will soon have a more convenient access point.”

The new instrument will offer competitive trading conditions compared to other cryptocurrency ETPs listed in Europe. The management expense ratio (MER) will be 0.35%.

“The FCA's approval in this regard could lead to wider adoption of the asset class by institutions, as many professional investors have been unable to access investment opportunities in Bitcoin and other assets. cryptocurrencies due to regulatory restrictions and uncertainty,” Marinov added.

WisdomTree Bitcoin Fund

Notably, WisdomTree is also the first company to issue a cryptocurrency ETP in Europe in 2019. They currently offer a range of such instruments and are listed on exchanges in Germany, Switzerland, Paris and Amsterdam.

WisdomTree is also one of the companies launching the first spot Bitcoin ETF on Wall Street in the first half of January 2024.

WisdomTree commented, “The WisdomTree Bitcoin Fund is an exchange-traded fund whose investment objective is to gain exposure to the price of bitcoin, net of fees and liabilities, by holding bitcoin. The fund typically evaluates its shares on a daily basis using independently calculated values based on an aggregation of trade flows executed on major bitcoin spot exchanges.”

BTCW's current price of just under $74 is near all-time highs and is directly correlated to the price of bitcoin. It has risen more than 80% since its January low.

What is the difference between an ETP and an ETF? ETPs are a broad category that includes a variety of investment vehicles such as ETFs, exchange-traded non-bonds (ETNs) and exchange-traded commodities (ETCs). An ETF is a specific type of ETP, so all ETFs are ETPs, but not all ETPs are ETFs.