How to invest in UK bitcoin and crypto ETNs

Now that bitcoin and other crypto ETNs are set to be made available to retail investors, should you hold them? And where can you do it? Here’s what’s happening.

On 8 October 2025 the UK’s Financial Conduct Authority (FCA) lifted its ban on the sale of cryptocurrency exchange traded notes (ETNs) to retail investors. 

This marks a major policy reversal. The ban had been in place since 2021, restricting ordinary investors from buying exchange traded products linked to crypto assets.

The decision reflects a broader trend of integrating digital assets into mainstream financial markets. 

For UK investors, this means that products offering exposure to cryptocurrencies such as bitcoin and ether are once again available through regulated exchanges. 

However, it is important to understand how ETNs work, how they differ from other investment vehicles, and what rules apply to their use in tax-efficient accounts.

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How crypto ETNs work

Exchange traded notes are debt instruments issued by financial institutions. They are listed on stock exchanges and trade in a similar way to shares or exchange traded funds (ETFs). 

However, unlike ETFs, ETNs do not hold the underlying assets directly. Instead, they provide exposure through a promise by the issuer to deliver returns that track a specified index or asset price.

In the case of crypto ETNs, the note is designed to replicate the performance of a cryptocurrency such as bitcoin or ethereum. The issuer may achieve this by holding the coins in custody or by using derivatives to mirror the price. 

Investors do not own the cryptocurrency itself but instead hold a note that entitles them to returns based on the coin’s market movements.

The benefit of ETNs is that they make investing in crypto accessible through traditional brokerage accounts without the need to manage digital wallets or private keys. 

They also operate under the rules of regulated exchanges, which can provide an additional layer of oversight compared with unregulated crypto trading platforms.

However, ETNs are not risk free. Because they are debt securities, investors are exposed to the credit risk of the issuer. These investments are also not covered by the Financial Services Compensation Scheme (FSCS).

If the issuing bank or financial institution were to default, investors could lose their money regardless of how the underlying cryptocurrency performs. Additionally, crypto assets remain volatile, and the value of an ETN can swing sharply.

Where investors can buy crypto ETNs in the UK

With the ban lifted, UK investors can in theory now access crypto ETNs through established exchanges where these products are listed. 

The London Stock Exchange (LSE) is expected to play a central role, with issuers bringing new products to market for retail buyers. In practice, this means investors should be able to purchase ETNs via ordinary brokerage accounts that provide access to listed securities.

Several European exchanges, such as those in Frankfurt and Zurich, already host crypto ETNs. Some of these products may be made available to UK retail investors through cross-listings or through UK brokerage platforms that offer international market access.

Investors should be aware that not all brokers will immediately offer crypto ETNs. Availability will depend on the platforms’ compliance policies, demand from clients, and the range of products approved by regulators. Checking with a broker directly is the simplest way to confirm whether a specific ETN is available for purchase.

Holding in ISAs or pensions

HMRC has confirmed that crypto ETNs will be eligible for inclusion in ISAs and registered pension schemes, but with time limits and reclassifications.

From 8 October 2025, crypto ETNs can be placed in stocks and shares ISAs, giving investors tax-free growth and protection from capital gains tax. However, this treatment will only last until 6 April 2026, when ETNs will cease to qualify for stocks and shares ISAs and instead become eligible only for Innovative Finance ISAs (IFISAs). 

HMRC has said that any ETNs already held in stocks and shares ISAs before that date will automatically be treated as IFISA-qualifying investments afterwards. What remains unclear is whether ISA providers will manage the transition on behalf of investors, or whether investors themselves will need to act.

For pensions, the position is simpler. From October 2025, crypto ETNs will be eligible for registered pension schemes including SIPPs, offering the usual tax advantages of pension saving. 

However, not all providers may permit them, as some could judge crypto-linked products too volatile or unsuitable for retirement portfolios.

In practice, investors will need to check carefully with their ISA or pension provider to confirm availability, since eligibility in law does not guarantee access in practice.

Considerations for investors

The reintroduction of crypto ETNs into the UK retail market will likely increase accessibility to digital asset exposure. For those who want to participate in cryptocurrency markets without dealing directly with exchanges and wallets, ETNs offer a regulated route.

However, investors must weigh the risks carefully. Volatility in crypto prices remains extreme compared with traditional asset classes.

The credit risk of the issuer adds another layer of potential loss. Tax treatment is another area to consider. Even if ETNs are listed securities, gains will typically be subject to capital gains tax outside of tax-efficient wrappers.

As with any investment, diversification and risk management are crucial. Crypto ETNs may suit a small allocation within a broader portfolio but should not be relied on as a core holding.

The FCA’s decision to reopen the retail market for crypto ETNs signals a growing recognition of digital assets in mainstream finance. For UK investors, it offers a new way to gain exposure to bitcoin, ethereum and other cryptocurrencies through traditional brokerage accounts.

That said, ETNs are not without significant risks. They are complex products tied both to the performance of volatile assets and to the financial health of their issuers. Their availability within ISAs and pensions is also limited, making them less attractive for long-term tax-efficient investing.

For those willing to accept the risks, crypto ETNs provide an accessible, regulated gateway to the digital asset market. But caution, research and a clear understanding of the potential downsides remain essential before committing capital.

DISCLAIMER

This article is produced for general informational purposes only. It should not be construed as investment, legal, tax, mortgage or other forms of financial advice. 

If in any doubt about the themes expressed, consider consulting with a regulated financial professional for your own personal situation. 

Past performance is no guarantee of future results. Investments can go down as well as up and you may get back less than you started with. 

Investments are speculative and can be affected by volatility. Never invest more than you can afford to lose. For more information visit ⁠⁠⁠www.fca.org.uk/investsmart⁠