Despite modest volumes, the firm’s bitcoin and ethereum exchange-traded notes (ETNs) listed on the London Stock Exchange (LSE) are performing as expected, according to company spokeswoman.
The 21Shares Bitcoin ETN, the 21Shares Ethereum Staking ETN, the 21Shares Bitcoin Core ETN, and the 21Shares Ethereum Core ETN are the four new crypto exchange-traded notes (ETNs) that 21Shares introduced in May.
Citing crypto ETP providers, CryptoNews said that institutional demand is minimal, which is preventing London-listed crypto ETNs from attracting inflows.
“We disagree that it’s a lack of institutional or professional interest. We feel it’s more due to the fact that these investors have had access to these products for years on exchanges outside of the UK,” said a representative from 21Shares.
“We expected minimal trading volumes on LSE, and that’s exactly what we’re seeing,” 21Shares stated.
The Financial Conduct Authority (FCA) has mandated that only accredited investors may purchase crypto ETNs. In 2021, the FCA banned the selling of crypto derivatives and ETNs, and since then, ordinary people have been unable to invest in these products.
Issuance Swiss AG’s independent board member Laurent Kssis said that institutional demand is lacking. Many people believe that the main forces behind the high trading volumes in conventional financial markets come from institutional investors like pension funds, asset managers, and hedge funds.
“The LSE is really late to the party,” said Hector McNeil HANetf, co-founder and co-CEO of Hanetf, in an interview with CryptoNews. McNeil stresses that Xetra, the German Electronic Exchange, and similar marketplaces have a plenty of liquidity.
The FCA’s decision to welcome professional investors to the UK market for these products is a significant development, according to 21Shares.
The permission from the FCA and LSE has prompted several wealth and private banking platforms to begin thinking about ways to include Bitcoin or Ethereum in the portfolios of its professional customers.
As for the crypto ETNs, 21Shares said that “they are just cross-listings of existing products. They also mentioned that experienced investors will trade on the most liquid platforms, which is now Xetra.”
In spite of the sluggish start, 21Sahres said that it anticipates increased trading activity after the platforms finish onboarding the newly listed ETPs.
“We still feel the FCA clearance for professional investors in the UK is a very significant milestone for the asset class. We look forward to the market opening up for consumers at some future point – which will be more of the “game changer” moment,” said 21Shares.
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