% 1.61
BTC Dominance:
% 0.21
Market Cap:
$2.38 T
% 1.77
Fear & Greed:
74 / 100
$ 66.136
BTC Dominance:
% 54.5
Market Cap:
$2.38 T

21Shares: Retail Access to Crypto ETNs a Game Changer


Since they debuted on the London Stock Exchange on May 28 following clearance from the Financial Conduct Authority, the national financial regulator, UK crypto exchange-traded notes backed by bitcoin and ether have seen minimal trading volumes.

21Shares and Low Trading Volumes

Unlike U.S. exchange-traded funds, only professional investors are allowed to trade the products, and bringing them up to the retail sector would be a “game changer,” says one of the issuers, 21Shares.

In the UK, 21Shares sells four bitcoin and four ether-backed cross-listed products. WisdomTree oversees two Bitcoin and two Ethereum ETNs; Invesco also provides two products with bitcoin backing. Crypto ETNs must be physically backed, non-leveraged, and expose just bitcoin or ether if they are to be listed on the LSE.

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WisdomTree estimates 59% of the trading volume and 21Shares at 41%; hence, the total turnover for all the products combined amounts to just $504,880 as of June 6. Data from 21Shares shows that thus far, Invesco products have seen 0% trading volume.

The four UK crypto products from WisdomTree have witnessed relative trading volumes thus far. But with 76% of its trading volumes coming from Ethereum among 21Shares‘ products, they have been more successful. Inside that, without a staking payout, 21Shares‘ Ethereum Staking ETPs have witnessed about 57% more trading volume than its Core Ethereum product.

21Shares’ Market Strategy

Based on the statistics shown, 21Shares‘ products keep the tightest average daily spread among the crypto ETNs on the LSE. An essential gauge of the cost of trading and the liquidity of the products on offer, the spread is the average difference between the bid (buy) price and the ask (sell) price of an ETN over a trading day.

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Professional traders will usually purchase and sell financial products straight with another party outside of official exchanges like the LSE or via the most liquid exchange, 21Shares observed.

While the FCA opening up the UK market to professional traders is a “huge step in the right direction,” as these are also cross-listed products, meaning the financial instruments are listed and traded on multiple exchanges across different countries or regions, the low trading volumes were “in line with expectations,” 21Shares UK Head Alex Pollak told The Block.

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“Professional investors will trade on markets with the most liquidity, which as of yet is Deutsche Börse Xetra,” Pollak added. For trade in German shares and European ETPs, Xetra serves as the reference market. First to launch crypto ETPs on Xetra in July 2020, 21Shares.

But the FCA and LSE’s “stamp of approval” has meant that many wealth and private banking platforms are now actively thinking about how they might either offer or add a bitcoin or ether allocation to professional client portfolios, Pollak said. Once the platforms finish their onboarding process, we anticipate seeing more trading volume, he said.

“We still believe the FCA approval for professional investors in the UK is a really important step for the asset class. We look forward to the market opening up for retail at some future time, which will be more of a ‘game changer,'” Pollak said.

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