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First Bitcoin Product to Reach European Stock Market

Stock markets

September 29, 2020 | 

JOHN K MWANIKI |  0 Comments| 

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The growth of crypto into the mainstream world has taken a step further. This is after listing a Bitcoin exchange-traded product (ETP) on European stock exchanges. Crypto had an earlier run in European markets. Several banking institutions offer custodial securities. The ETP becomes a primary regulated product on the trading platforms. 

The ETP provided by 21Shares is now listed on the 3 DACK countries. These are Australia, Germany, and Switzerland. The listing opens up the crypto world to the institutional and retail investors. The stock exchanges are already accepted, making it easier to use for digital assets

The ETP trades under the symbol ABTC. It looks to help improve market traction of Bitcoin and Ethereum. It also seeks to ensure more security and transparency for alternative investments. 

ABTC is available in Six Swiss Exchanges. It trades in GBP, USD, EUR, and CHF.

21Shares is an experienced Bitcoin product service provider. Its first of its kind Bitcoin product went live in Deutsche Borse's Xetra trading platform. The development came with a percentage of Bitcoin and Ethereum. Also, bits of Ripple, Bitcoin Cash, and Litecoin. 

Possible Effects of the Listing on Crypto Economy 

The listing of the Bitcoin products on the leading European stock markets is a win for the crypto world. It is yet another development for the ever-improving sector. 

Cryptos have been looking to become mainstream. Even though their activity has risen of late, they are yet to occupy the mainstream market. The public listing, however, sets it at par with the traditional assets. It gains a broader mass market willing to trade on the new assets. 

The listing is also great for institutional investors. Most of such investors operate within strict guidelines. They are not allowed to trade in the less regulated crypto exchanges. The listing on the stocks now means the currency is safer. 

The listing boosts the user confidence on the crypto assets. The stock exchanges have been running for the most extended times. They are regulated, and only trade approved products. Trading Bitcoin products means approval for the cryptos. 

Trading Bitcoin products on the stock markets set it up as the product of the future. The competition among the stock exchanges is high. The other European stock exchanges are likely to consider listing the digital currencies

Every exchange wants to provide the traders with a wide variety. They are looking to provide the traders with different alternatives for safety. The recent times have seen less activity on most exchanges. This has been different from the crypto world that has been on the rise. Bitcoin products provide the best alternative asset. It comes in place of the slowing traditional stocks.

Possible Negative Impacts of Bitcoin Product Listing on Exchange

Availing the crypto products for mainstream investment looks good from any angle. It, however, misses the point of Bitcoin looking to liberate the traditional economy. Bitcoin was created to work without any controlling authority. Every user needs to have their keys. 

In a Twitter exchange, Anita Posch acknowledges the crypto investment products' growth. The host of the Bitcoin &Co. podcast, however, reiterates the possible concerns of such investments. She states the need for Bitcoin users to own their wallet keys. It is the assured measurement of ownership and security. 

Digital currencies are more individual-centered. The growth of ETPs and stock trading gives rise to more intermediaries. Other exchanges like Coinbase are also key in the development of tradable products. As these platforms become powerful, they gain control over the cryptocurrencies. With time they might start influencing the price movements of the assets. This goes against Bitcoin value control, which is free decentralized

There is also the risk of the insolvency by some of the companies listing the crypto assets. They are not compelled by regulations to provide for reserves. It means any losses from other investments can affect the crypto investors.

Why the UK is yet to adopt the Bitcoin Products on the Stock Exchange 

The UK runs one of the biggest stock markets in the world. Most traders would expect the London stock to be the first to list Bitcoin products. It appears they are not embracing the crypto products. They are yet to announce any plans to introduce any product.

Its rivals like SIX Swiss and Deutsche Boerse already list these products. The London stock exchange, however, still has concerns to contend with. These include; 

  • Regulations hurdles 

The UK's stock market has one of the hardest regulators. The Financial Conduct Authority is not any friendly to the Bitcoin economy. It has always treated the new assets with contempt. It had earlier on banning the sale of crypto derivatives to retailors.

The regulatory body sited the volatility of the coin and use for criminal activities for the ban. It concluded the assets are risky and unsuitable for retail consumers. 

  • The challenges to clear underlying assets 

The clearing is essential before listing of products on any stock exchange. It is a way to reduce the risk of settlement failures. The clearing houses are yet to make any progress with the London stock exchange. 

The listing of the Bitcoin products on the other European markets might help speed it up. The London market would not want to lag behind the other securities exchanges

Bottom Line 

The role of crypto is becoming integral in the economy. Traders are looking to it as the best alternative asset. It is now hitting the European stock markets as Bitcoin exchange-traded products. 

Started a few months back, the Bitcoin ETP is becoming popular in the European stock markets. The stocks in most significant towns list it like the traditional stocks. This has opened it up for unprecedented mainstream use. Its acquisition will rise as more traders embrace the coin. It, however, comes with a few concerns to note.

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