UK Set to Open Crypto ETP Market to Retail Investors

UK Poised to Welcome Retail Crypto Investors

The UK's Financial Conduct Authority (FCA) is set to reverse its four-year ban on the sale of crypto exchange-traded notes (cETNs) to retail investors, effective October 8th. This move coincides with record inflows into European crypto exchange-traded products (ETPs), indicating a growing appetite for digital assets among everyday investors.

Key Takeaways

• Record Inflows: European crypto ETPs attracted a record €972 million in Q3 2025.
• FCA Policy Shift: The FCA will lift its retail ban on cETNs on October 8th, citing a more mature market and improved consumer protections.
• Cautious Optimism: While analysts view the change as a significant step for crypto adoption, concerns about volatility persist.

Record Demand for Crypto ETPs

The third quarter of 2025 witnessed unprecedented demand for European crypto ETPs. Net inflows reached €972 million, marking the highest quarterly total on record. Year-to-date inflows have already reached €1.7 billion, positioning 2025 as a record-breaking year for the crypto ETP market. This surge in demand anticipates the FCA's decision to lift the ban on selling cETNs to retail investors, aligning the UK with regulatory frameworks in the EU and the US.

FCA's Rationale for Reversal

The FCA initially imposed the ban in 2021 due to concerns about the risk associated with crypto assets for ordinary investors. However, the regulator now believes that the market has “evolved significantly,” with improved consumer protections and a better understanding of the products. The rule change will allow asset managers to list bitcoin- and ethereum-linked ETNs for retail investors. Major players in the European crypto ETP market, such as CoinShares, 21Shares, and WisdomTree, are expected to expand their listings on UK exchanges.

A Note of Caution

Despite the enthusiasm, analysts urge caution, emphasizing that crypto's inherent volatility makes it unsuitable for all investors. Investors should treat crypto as a long-term holding, allocating a limited portion (no more than 5%) of a diversified portfolio, with a minimum holding horizon of 10 years.

The Future: Potential ISA Inclusion

The next catalyst for mass crypto adoption could be the inclusion of crypto ETNs within Individual Savings Accounts (ISAs). This would provide tax advantages to crypto investors, potentially driving even greater adoption than regulatory approval alone.