Key Takeaways
- An FCA rule change will let retail investors in the U.K. access crypto exchange-traded notes (ETNs).
- A recent survey suggests 50% of U.K. investors aged 18–24 are interested in crypto ETNs.
- Reasons for their interest include being able to gain crypto exposure via tax-efficient ISAs and pension accounts.
From Oct. 8, asset managers will be able to offer exchange-traded notes (ETNs) with crypto exposure to retail investors in the U.K., lifting a ban that has been in place since 2021.
According to research by IG shared with CCN on Monday, Oct. 6, 50% of U.K. investors aged 18–24 would consider investing in crypto ETNs, signalling strong demand among the cohort.
Crypto ETNs Arrive in the UK
For asset managers, the lifting of the FCA embargo on crypto ETNs opens up one of the largest securities exchanges in the world—the London Stock Exchange.
Among potential issuers, Blackrock is at the front of the queue to list a Bitcoin ETN in London. Bitwise, WisdomTree, and 21Shares, which all list equivalent ETNs for qualified investors, are widely expected to follow suit.
In the meantime, 21Shares has partnered with Stratiphy to make its existing products available to investors in the U.K.
The company currently offers crypto ETNs spanning Bitcoin, Ether and an array of altcoins. These can be accessed by retail investors on a network of European exchanges.
Significant Interest Among Young Investors
According to the IG survey, 30% of adults in the U.K. are open to investing in crypto ETNs, a figure that rises to 50% among 18-24-year-olds.
Those numbers are considerably higher than current crypto ownership rates in the country. A 2024 FCA survey found that around 12% of the U.K. population owned crypto, with the average value of holdings sitting at £1,842.
The discrepancy suggests British investors are drawn to the enhanced credibility of the ETN wrapper. Meanwhile, the IG report suggests a potential tax advantage may also explain the difference.
Tax Advantages of Regulated Crypto Products
Under U.K. regulation, investors can shelter deposits made into a stocks and shares ISA (interest savings account) from capital gains tax, up to a maximum allowance of £20,000 per year.
Meanwhile, deposits made into a Self-Invested Personal Pension (SIPP) account are eligible for government contributions that offset income tax.
However, both schemes are restricted to certain “qualifying investments.” These include government bonds and securities listed on an approved exchange, but not cryptocurrencies.
Among respondents to the IG survey who said they were likely to invest in crypto ETNs, 19% highlighted the ability to hold crypto within tax-efficient wrappers as a key advantage.
The report found strong public support for expanding the range investments eligible for tax relief. Forty one percent of respondents favored allowing crypto ETNs in ISAs, compared to just 20% who opposed the idea. For pension accounts, 37% supported their inclusion versus 21% who opposed it.
Responding to a question from CCN, Stratiphy CEO Daniel Gold said the company planned to make crypto exchange-traded products available in its ISA and SIPP offerings once the the ban has been lifted.
“We expect strong investor appetite as the U.K. catches up with other European markets,” he said, adding that the rule change will “empower investors to seek new and diverse opportunities.”
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James Morales is CCN’s blockchain and crypto policy reporter. He has been working in the news media since 2020, writing about topics such as payments, banking and financial technology. These days, he likes to explore the latest blockchain innovations and the evolving landscape of global crypto regulation.
With an educational background in social anthropology and media studies, James uses his platform as a journalist to explore how new technologies work, why they matter and how they might shape our future.
