Executive Summary

Valour, a unit of DeFi Technologies, has launched a Bitcoin staking Exchange-Traded Product (ETP) on the London Stock Exchange (LSE). This financial instrument provides professional and institutional investors with regulated exposure to Bitcoin alongside an annual yield of 1.4%. The ETP is physically backed, with Bitcoin held in institutional-grade cold storage. This strategic introduction positions the UK market for broader engagement with digital asset products, particularly as the Financial Conduct Authority (FCA) is set to allow retail access to crypto ETNs on recognized investment exchanges starting October 8, 2025. This launch builds upon Valour's existing presence in European markets, including a similar product trading on Deutsche Börse's Xetra platform since November 2024. The announcement led to a 5% increase in DeFi Technologies' stock on Nasdaq, reflecting positive market sentiment toward regulated cryptocurrency investment vehicles.

The Event in Detail

Valour Digital Securities Limited, a subsidiary of DeFi Technologies, initiated trading of the world's first physically-backed Bitcoin staking ETP on the London Stock Exchange. The product, identified by ISIN GB00BRBV3124, offers a 1.4% annual yield and is fully collateralized by physical Bitcoin stored in cold custody with Copper. Security for the underlying assets is enhanced through multiparty computation technology. The ETP is currently accessible to professional investors and is denominated in both GBP and EUR. This product's yield is incorporated into its daily Net Asset Value (NAV), which, along with Bitcoin entitlements, is published daily to ensure transparency for investors. Valour has an established presence in the European market, managing over 85 ETPs across various exchanges, including those in the UK, Sweden, Germany, Switzerland, and the Netherlands. While Bitcoin itself does not inherently offer staking rewards through a proof-of-stake mechanism, Valour has generated yield in previous products, such as its offering on Deutsche Börse's Xetra launched in November 2024, by utilizing platforms like Core Chain, an EVM-compatible layer-1 network anchored to Bitcoin's proof-of-work.

Market Implications

The introduction of Valour's Bitcoin staking ETP on the LSE is a significant development for the regulated digital asset landscape in the UK. It offers institutional investors a mechanism to gain yield-bearing exposure to Bitcoin within a traditional financial framework, addressing concerns about security and operational complexities. This ETP follows the earlier listing of Bitcoin and Ether ETPs on the LSE in May 2024, indicating a progressive integration of digital assets into established financial markets. The FCA's decision to lift the ban on retail access to crypto ETNs, effective October 8, 2025, signals a pivotal shift in the UK's regulatory approach. This move is anticipated to broaden the investor base for such products significantly, mirroring the "Big Bang" reforms of 1986 in its potential impact on London's financial sector. The sustained prohibition on crypto derivatives and leveraged products for retail investors, however, indicates a continued cautious stance by the regulator regarding higher-risk crypto investments.

Broader Context

The UK's evolving regulatory environment, particularly the FCA's move to allow retail access to crypto ETNs and the Staking Order issued in January 2025 clarifying the classification of staking arrangements, positions the country as a potentially competitive global hub for digital finance. This regulatory clarity is expected to catalyze adoption, reshape risk-adjusted returns, and stabilize markets. The FCA plans to implement a comprehensive regulatory framework for the crypto industry by 2026, which will impose full authorization requirements on crypto firms, covering capital, governance, and operational resilience, including robust cybersecurity measures. The integration of the OECD's Crypto-Asset Reporting Framework (CARF) also points to increased transparency and compliance demands for firms. This strategic alignment with global crypto markets, coupled with rising investor interest in regulated products, suggests a future where digital assets are increasingly integrated into the mainstream financial ecosystem, encouraging domestic innovation and product development within the UK. The 5% rise in DeFi Technologies' stock post-announcement underscores market confidence in these developments and the potential for increased institutional and retail participation in regulated digital asset investments.