The London Stock Exchange is set to accept applications for the admission of Bitcoin and Ethereum exchange-traded notes (ETNs). The LSE made the disclosure on Monday, stating that the development will surface by the second quarter of 2024. More so, the statement emerged after the LSE published its Crypto ETN Admission factsheet.
According to the factsheet, the exchange states how the crypto ETNs must be non-leveraged and back physically. Also, the London Stock Exchange highlighted that the price of the offering should be measured according to the value of its underlying assets. In addition, the exchange also said that the value should be publicized and supported by Bitcoin.
Furthermore, as part of its stipulated guidelines in the factsheet, the exchange mandates that the underlying assets must be held in a cold wallet or its equivalent. To ensure utmost security, the LSE revealed that the assets must be kept with a custodian who is in compliance with the Anti-Money Laundering regulations in the United Kingdom, the United States, Switzerland, or the European Union.
Growing Confidence as LSE Announces Plans for Crypto ETNs
Presently, the exchange hasn’t disclosed the exact date it will start accepting the application. However, the crypto community is confident that the ETNs will further push the price of BTC to new heights. The ETN is mostly viewed as a reliable option for exchange-traded funds (ETFs). Meanwhile, the LSE defined ETNs as debt securities that offer exposure to underlying assets.
On the flip side, ETFs mostly focus on debt methods that are difficult to fit into funds. With Crypto ETNs, investors can trade securities that are capable of tracking the performance of cryptocurrency assets during LSE’s trading hours. Although the two offerings are different, investors are optimistic that the launching of ETNs will enjoy significant success like that of the ETFs.
Since the launching of ETFs in January after the United States Security and Exchange Commission gave investment firms the green light, the offering has enjoyed a significant inflow of funds. As of March 8, 2023, the trading volume for Bitcoin ETF surpassed $100 million.
Likewise, the price of BTC has been on the rise ever since. In the last 30 days, BTC has soared by 49% surpassing $60k for the first time in two years. Consequently, BTC has recorded a price rally to set a new all-time high of $72,377 on Monday.