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- On May 28, the London Stock Exchange will launch ETNs tracking the price of Bitcoin and Ether, with applicants urged to express interest from April 8.
- The announcement boosted the price of both cryptos, with BTC soaring past $70,000 for the first time in two weeks as Ether surged over 8% to trade above $3,600.
The London Stock Exchange will debut Bitcoin and Ether exchange-traded notes in two months, an announcement that has sparked price rallies for the two largest cryptocurrencies.
LSE announced this week that it will launch support for the ETNs on May 28, subject to approval from the Financial Conduct Authority. The announcement was a detailed follow-up to its statement on March 11 expressing interest in the products. This was the same day the FCA gave its green light for such products after pressure piled up following the approval of spot ETFs for BTC in the US market, as Crypto News Flash reported.
LSE will start accepting applications on April 8. However, it has allowed enough time before the official launch to ensure that any interested issuer files the application. The seven weeks between April 8 and May 28 will give the issuers enough time to prepare the required documentation and gain the approval of the FCA.
While the issuers have seven weeks to get their house in order, they must submit by April 15 a letter outlining how they plan to meet all the requirements on the crypto ETN factsheet. They must also submit a draft of the base prospectus showing where such requirements are included in its actual base prospectus.
To list their ETNs on the first day of trading, issuers must receive approval of their base prospectus from the FCA by midday on Wednesday, May 22.
Only professional investors will be eligible to trade the crypto ETNs, in line with the UK’s laws, which bar retail traders from derivatives and other sophisticated products. This extends to crypto derivatives, which the FCA banned in January 2020. It claimed they were “ill-suited” for retail investors. Although some stakeholders argued this would push traders into exchanges like Deribit and BitMEX, which are not as strictly regulated as they are offshore, the government has been unrelenting.
LSE ETNs Push Bitcoin and Ether Prices
While the LSE’s announcement wasn’t entirely new, it gave a much-needed boost to BTC and ETH prices after a loss of momentum following their historic marches to new highs two weeks ago.
Bitcoin changes hands at $70,283, shooting up from $65,000 just before the LSE’s announcement. Since surging above $70,000 on Monday, BTC has traded above this critical threshold, with a slight and quickly-corrected dip on Tuesday.
As Crypto News Flash reported, analysts believe the pullback from the new all-time highs reached just two weeks ago could be the dreaded pre-halving dip that almost always occurs. With that behind it, BTC could be on the up through to the halving and beyond.
Ether, on the other hand, is trading at $3,600, and while it has been trading sideways in the past day, the LSE ETN announcement injected new life earlier this week. ETH gained from $3,340 to a weekly high of $3,675 on Tuesday.