Bitcoin ETNs are returning to London after a four-year hiatus, a move that industry observers say could be more consequential than many expect. From October 8, retail investors in the UK will once again be able to gain exposure to bitcoin without holding the asset directly, after the Financial Conduct Authority (FCA) lifted a ban that had lasted since January 2021. The initial ban reflected regulators’ concerns about extreme volatility, opportunities for fraud and the difficulty of accurate valuation in crypto markets. CoinDesk’s reporting notes that the reversal comes against a backdrop of brisk demand for crypto-linked vehicles elsewhere, with U.S. spot bitcoin ETFs drawing substantial inflows and a growing ecosystem of exchange-traded products across Europe. The move is being framed by some observers as a potential turning point for London’s role in global finance. Charlie Morris, founder of ByteTree, warned that “the importance of bitcoin exchange traded notes coming to London is being underestimated,” arguing that the city’s status as a global financial hub could amplify the reach and legitimacy of crypto exposure through regulated structures. Speaking to CoinDesk, Morris added that London’s deep touchpoints—from custody to settlement—mean a successful relaunch could matter far beyond the trading desk. Another veteran investor, Nicholas Gregory, known in crypto circles as Bitcoin OG, described the reversal as more than a rule change and suggested it signals a reconfiguration of the UK’s financial landscape. Yet not everyone expects instant uptake: Peter Lane, chief executive of Jacobi Asset Management, cautioned that the UK adviser network remains fragmented, and it will take time for firms to adjust due diligence and suitability processes before any broad recommendation of these products to clients.

The regulatory arc behind this moment helps explain why the move is being watched closely. The FCA’s 2020 decision to ban the sale of crypto derivatives and ETNs to retail investors cited multiple harms: retail buyers struggled to value these assets, crypto markets exhibited high volatility, the products were susceptible to abuse and financial crime, and there was no clear investment need for retail exposure. In the regulator’s view, prohibiting sale, marketing and distribution to retail clients was intended to prevent harm, with the anticipated savings estimated at around £53 million in avoided losses. The ban took effect on January 6, 2021. A corresponding evolution in policy followed in 2024, when the FCA stated that it would not object to the creation of UK-listed market segments for cryptoasset-backed notes intended for professional investors, provided they complied with the UK Listing Regime and ongoing disclosure requirements; the position emphasised that cETNs and crypto derivatives remained unsuitable for retail consumers and would continue to be reviewed as more trading history accrues. The latest turn of events—announced in June 2025—confirmed a plan to lift the retail ban on cETNs, contingent on trading on FCA-approved Recognised Investment Exchanges and subject to standard financial-promotion rules to ensure appropriate risk disclosures; the FCA also stressed that the ban on crypto derivatives would remain in place as regulation continues to evolve under its roadmap. David Geale, quoted in the regulator’s June release, framed the change as an opportunity to rebalance risk and expand consumer choice while guarding against harm.

Beyond regulatory specifics, the UK’s broader position in global finance remains a factor. Even as London regroups after Brexit and reasserts its competitiveness, global investors continue to compare London’s financial-centre credentials with those of New York and other capitals. A 2024 Reuters survey of the Global Financial Centres Index highlighted New York as the world’s leading financial centre, with London occupying a strong second place across FX, investment banking and fintech—demonstrating London’s persistent clout even as the industry evolves. The dynamic is further framed by the US ETF boom: by early 2025, the United States had already hosted a wave of spot bitcoin ETFs with substantial inflows since their 2024 inception, underscoring investor appetite and regulatory shifts that spur product innovation while also prompting caution around volatility and policy risk. Taken together, these developments position London’s forthcoming cETN access as both a test of regulatory craft and a potential catalyst for a more globally connected UK market—one that could attract new capital if the market infrastructure, disclosure standards and adviser networks align with the ambitions of a modern, regulated crypto investment channel.

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Source: Noah Wire Services