Exchange-Traded Funds (ETFs) linked to Bitcoin and Ethereum in the UK have experienced limited trading activity since their introduction on the London Stock Exchange (LSE) on May 28. This launch coincided with the endorsement from the UK Financial Conduct Authority (FCA).

In contrast to their American equivalents, these financial instruments are restricted to transactions by professional investors. However, 21Shares, a key provider of these ETFs, envisions that widening access to these products for the general market could have a significant impact.

In the UK market, 21Shares offers a range of eight products, with four linked to Bitcoin and four to Ethereum. WisdomTree manages a collection of four ETFs, comprising two for Bitcoin (BTC) and two for Ethereum (ETH), while Invesco presents two offerings linked to Bitcoin. To be listed on the LSE, cryptocurrency ETFs must be physically secured, free from leverage, and solely track the performance of Bitcoin or Ethereum.

Since their introduction, the cumulative trading volume for all these funds stood at a modest $504,880 as of June 6. WisdomTree dominates the transaction volume with 59%, whereas 21Shares represents the remaining 41%. In contrast, Invesco's ETFs have yet to record any transaction activity. Notably, in the US, traditional Bitcoin ETFs recorded a trading volume worth $2.5 billion in a single day last Friday.

Within 21Shares' offerings, the Ethereum-linked products have been more popular, constituting 76% of the total transaction volumes. Among these, the Ethereum Staking ETFs by 21Shares exhibited about 57% higher trading activity compared to the Core Ethereum product excluding staking returns.

21Shares highlighted that professional investors typically engage in over-the-counter (OTC) trading, involving the direct exchange of financial assets outside formal exchanges like the LSE, either with a counterparty or via the most liquid exchange.

[Note: This is not financial advice.]