The UK has taken a decisive step towards mainstream cryptocurrency adoption after the Financial Conduct Authority (FCA) lifted its three-year ban on retail trading of exchange-traded crypto products (ETPs).
The decision, announced on October 8, a January 2021 restriction that prevented retail investors from accessing crypto exchange-traded notes (ETNs) due to volatility and consumer protection concerns will be reversed.
As a result, trading on approved UK exchanges such as the London Stock Exchange is expected to begin on October 16, marking a new phase for regulated crypto investments in Europe’s largest financial market.
According to the FCA, eligible ETNs will initially cover Bitcoin and Ethereum, and all trading will take place via authorized UK investment exchanges with consumer protections.
Opening up crypto to an £800 billion market
The FCA’s decision comes at a crucial time for the market, as it is both a policy breakthrough and a catalyst for new inflows.
Bradley Duke, Head of Europe at Bitwise, called it is “incredibly positive”, highlighting that Britain remains Europe’s largest investment base. The arrival of retail capital, he said, “unleashes a deep demand pool that has been sidelined since 2021.”
The impact of the FCE’s move could extend beyond access.
HM Revenue & Customs (HMRC) confirmed that crypto ETNs will become eligible investments for the Innovative Finance ISA from April 2026.
This means that UK investors can now hold crypto ETPs in tax-advantaged accounts such as individual savings accounts (ISAs) and pension schemes.
This could also reshape retail participation, as Britain’s 12 million crypto users would be incentivized to hold Bitcoin in their retirement.
According to one report of the British authorities, the British had approximately £872 billion in ISA accounts. If even 1% of that capital is allocated to crypto ETPs, this would represent over £8 billion (equivalent to over $9 billion) of potential inflows, which is more than enough to shift the global market share of crypto exposure.
Skepticism persists
However, there is still skepticism about the sector.
Hargreaves Larsdown, the largest investment platform in Britain, has done just that belittled this potential increase in investments.
According to the company:
“HL Investment’s view is that bitcoin is not an asset class, and we do not think cryptocurrency has characteristics that mean it should be included in portfolios for growth or income and should not be relied upon to help clients achieve their financial goals. Performance assumptions are not possible to analyze for crypto, and unlike other alternative asset classes it has no intrinsic value.”
Despite these concerns, momentum around crypto investment products continues to grow worldwide.
In the US, spot Bitcoin ETFs have accumulated $62.8 billion in inflows since their launch in 2024, with net assets of $164.7 billion, according to SoSo Value facts. Additional data from CoinShares shows that global crypto funds have attracted $45.5 billion in new capital this year.
These numbers probably will rise significantly, as traditional financial institutional giants such as BlackRock and Morgan Stanley advise investors to allocate their money to the best cryptocurrencies.
