Crypto ETNs: UK Unleashes Access for Retail Investors

Key Points

1. The FCA's decision reverses a 2021 ban on retail access to Crypto ETNs, marking a shift in regulatory stance due to the market's increased maturity.

2. Crypto ETNs are unsecured debt securities that track the price of cryptocurrencies like Bitcoin and Ethereum, allowing investors to gain exposure without directly holding the assets.

3. Key risks of Crypto ETNs include counterparty risk, market volatility, and tracking errors where the ETN’s price may deviate from the underlying asset's price.

4. The FCA's reversal is based on the belief that the market for Crypto ETNs has evolved, making them more suitable for retail investors compared to the previous ban period.

5. Retail investors in the UK will be able to access Crypto ETNs through standard brokerage accounts starting October 8, 2024.