- UK retail investors can now invest in cryptocurrency exchange-traded notes after a four-year ban was lifted by the financial regulator.
- European demand for crypto exchange-traded products hit a quarterly high with net inflows of EUR 972 million in Q3.
- The FCA is expected to decide on allowing crypto ETNs in ISAs by the end of the year.
- The FCA lifted the ban due to increased maturity of crypto ETNs, but still warns of volatility and risks in direct crypto investment.
- UK investors can access crypto indirectly through platforms like Coinbase and Binance, with no consumer protection as with traditional investments.
- The next milestone for mass adoption could be allowing crypto ETNs within ISAs for tax advantages.
- Professional investors could access crypto ETNs in 2024, with retail access now expanded to regulated exchanges like the London Stock Exchange.
- ETFs hold underlying securities while ETNs track asset prices with credit risks but no tracking error.
- Advantages of owning crypto through ETNs include easy monitoring and minimized risk, while disadvantages include fees and indirect access.
- UK investors cannot yet buy crypto ETFs like in the US, but the FCA is considering allowing crypto ETNs in ISAs for tax advantages.
- Net inflows into European crypto ETPs hit EUR 972 million in Q3, with total assets at EUR 19.3 billion.
- Bitcoin dominates the European crypto ETP market with single-asset products representing nearly half of total assets under management.
Read more at Morningstar: As Bitcoin Hits Record High, UK Investors Gain Access to Crypto ETNs