Key Takeaways
- European crypto exchange-traded products attracted €972 million in Q3 2025.
- The FCA will lift its four-year retail ban on Oct. 8, citing a more developed market and improved consumer protections.
- While analysts view the change as a milestone for crypto adoption, Morningstar warns that extreme volatility means caution must remain.
Crypto investment products have hit record inflows ahead of a key regulatory shift in the U.K. that will, for the first time in four years, allow everyday investors to buy crypto-linked exchange-traded notes (cETNs).
The move signals a growing mainstream appetite for digital assets as regulators ease long-standing restrictions.
Record Inflows
Investor demand for European crypto exchange-traded products (ETPs) surged to unprecedented levels in the third quarter of 2025.
According to Morningstar, the segment attracted €972 million in net inflows during the period, the highest quarterly total on record.
So far this year, inflows have reached €1.7 billion, putting 2025 on track to become a record year for the crypto ETP market.
The surge comes as investors anticipate a U.K. Financial Conduct Authority (FCA) decision that will, from Wednesday, Oct. 8, lift the ban on selling cETNs to retail investors.
The reversal aligns Britain with regulatory regimes in the EU and the U.S.
FCA Eases Four-Year Ban, Citing Market Maturity
Retail access to crypto ETNs has been banned in the U.K. since 2021, after regulators deemed them too risky for ordinary investors.
However, the FCA now says the market has “evolved significantly,” highlighting improved consumer protections and better product understanding.
“Since we restricted retail access to cETNs, the market has evolved, and products have become more mainstream and better understood,” said David Geale, Executive Director of Payments and Digital Finance at the FCA.
“We’re providing consumers with more choice, while ensuring there are protections in place.”
The rule change will allow asset managers to list bitcoin- and ethereum-linked ETNs for retail investors.
Bitcoin-focused ETPs currently represent nearly half of all crypto ETP assets under management in Europe, Morningstar noted.
For asset managers, the FCA’s decision opens the door to millions of new investors and potentially billions of pounds in inflows.
Issuers such as CoinShares, 21Shares, and WisdomTree, which together dominate the European crypto ETP market, are now expected to expand listings on U.K. exchanges.
Volatility Caution Persists
Despite the enthusiasm, analysts warn that retail access does not make crypto suitable for all investors.
“Crypto’s extreme price volatility often fuels over-trading and gambling-like behaviour, which has historically led to poor investor outcomes,” said Madeleine Black, Associate Analyst at Morningstar.
She added that sensible investors should treat crypto as a long-term holding, limiting exposure to no more than 5% of a diversified portfolio, with a minimum holding horizon of 10 years.
Possible ISA Inclusion
While the FCA’s policy reversal marks a major milestone for crypto, Morningstar said the next catalyst for mass adoption may come if crypto ETNs are approved within Individual Savings Accounts (ISAs) later this year.
The move would grant tax advantages to crypto investors, potentially driving far greater uptake than regulatory approval alone.
“The tax advantages of such a change could prove far more influential in driving uptake,” Black said.
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Kurt Robson is a London-based reporter at CCN, specialising in the fast-moving worlds of crypto and emerging technology. He began his career covering local news in Cornwall after graduating from Falmouth University with First Class Honours in Journalism. There, he cut his teeth on everything from council meetings to missing swans.
He quickly rose through the ranks to become a frontline journalist at several of the UK’s leading national newspapers. Over the years, he has interviewed musicians and celebrities, reported from courtrooms and crime scenes, and secured multiple front-page exclusives.
Following the upheaval of the COVID-19 pandemic, Kurt shifted his focus to technology journalism—just ahead of the AI boom. With a natural curiosity and a trained eye for emerging trends, he has found a new rhythm in reporting on innovation.
At CCN, Kurt's work focuses on the cutting edge of crypto, blockchain, AI, and the evolving digital world. Drawing on his background in people-first reporting and his deep interest in disruptive tech, Kurt delivers stories that are insightful, entertaining, and human-centric.
