BlackRock leads asset managers launching BTC ETPs as FCA lifts ban on crypto ETNs

BlackRock has launched its iShares Bitcoin exchange-traded product (ETP) available on the London Stock Exchange (LSE), which has been a landmark event for the UK’s retail crypto investment sector. The launch comes after the Financial Conduct Authority (FCA) lifted its ban on retail access to crypto-based exchange-traded notes (ETNs) in 2021.

Trading under the ticker IB1T, BlackRock’s Bitcoin ETP enables investors to gain exposure to Bitcoin without having to own the cryptocurrency directly, but via a regulated exchange, as reported by FT.

The move by the asset manager marks increased institutional confidence in digital assets, especially as its flagship U.S.-listed iShares Bitcoin Trust (IBIT) already has $85.5 billion in assets, the world’s largest spot Bitcoin ETF.

BlackRock’s Bitcoin offering previously launched on key European markets such as Xetra, Euronext Amsterdam, and Euronext Paris, adding further to its expansion strategy across regulated markets around the world. With more than $13 trillion in assets under management, the increasing crypto portfolio indicates that digital assets have become a mainstream component of traditional finance.

BlackRock, 21Shares, Bitwise, and WisdomTree expand offerings

The FCA’s reversal has paved the way for other asset managers to launch crypto products to retail investors in the UK.

Switzerland-based 21Shares has issued four physically backed crypto ETPs on the LSE – including Bitcoin and Ether exposure – alongside lower fee “Core” options of CBTC and ETHC priced at just 0.10% management fees. CEO Russel Barlow said the move was a “landmark step for everyday investors,” adding that UK retail traders had long been shut out of access to regulated crypto.

Meanwhile, Bitwise joined the race by listing 4 ETPs, two tracking Bitcoin and two for Ethereum; while reducing fees on its Core Bitcoin ETP (BTC1) to 0.05% for 6 months. WisdomTree also introduced its physical Bitcoin and physical Ethereum ETPs, which were previously only available to high-net-worth individuals. These are now expected to become available through major UK investment platforms at a range of fees from 0.15% to 0.35%.

Alexis Marinof, WisdomTree’s Head of Europe, said the listings show the increasing maturity of the crypto market, which provides the same level of transparency and safeguards to retail investors seen in traditional asset classes.

FCA policy shift marks a turning point

The FCA’s move to remove its four-year ban on sales of crypto ETNs to retail investors is a notable policy shift in the regulation of investment in crypto assets. Originally enacted in January 2021, the ban limited the circulation and marketing of crypto derivatives and ETNs to retail consumers as a result of volatility and investor protection concerns.

In March 2024, the regulator authorized recognized exchanges to list crypto asset-backed ETNs for professional investors only. However, the most recent move makes that investment available to retail investors, via regulated brokers and investment platforms, including those that offer tax-advantaged accounts like ISAs and SIPPs.

The updated framework will bring the UK in line with the major crypto markets like the U.S., Canada, Hong Kong, and the European Union, where regulated crypto ETPs are now readily available. However, bans on wider crypto derivatives for retail investors are still being enforced.

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