Yesterday the London Stock Exchange (LSE) announced that it will start trading Bitcoin and Ether exchange traded notes (ETNs) on May 28. It follows the green light for trading given by the Financial Conduct Authority (FCA) earlier this month. However, crypto ETNs (cETNs) will only be available for institutional investors.
ETN issuers who want to launch on that date must provide a draft prospectus to the LSE by April 15. The LSE hopes to launch trading with multiple listed cETNs.
The interest is driven by the massive uptake in spot Bitcoin ETFs in the United States. Since the SEC allowed 11 Bitcoin ETFs to launch on January 10, the price of the cryptocurrency has increased by 50%. BlackRock’s IBIT ETF now has assets under management (AUM) of $17 billion, with Fidelity’s FBTC approaching $9 billion. The Grayscale Bitcoin trust converted to an ETF and peaked in terms of AUM on January 10 at $28.6 billion. Despite outflows from Grayscale to the new ETFs, with rising prices Grayscale still has the largest trust at $24.7 billion AUM.
How big are crypto investment inflows?
While the figures look substantial, they should be viewed in context. As of March 23, the top ten bitcoin-linked ETFs had combined assets of $58 billion. Taking the increased price on that date, at its pre-ETF AUM, Grayscale GBTC would have been worth $37.5 billion. So there’s been an inflow of roughly $20 billion, representing roughly 1.6% of an asset with a total market cap on the same day of $1.235 trillion.
