UK Crypto ETN Market Turns Fierce After Retail Access Restored — Issuers Slash Fees to 0.05%

Core Insights - A significant price war has emerged in the UK's cryptocurrency exchange-traded note (ETN) market following the reopening of retail investor access by regulators after over four years [1][2] - The Financial Conduct Authority (FCA) lifted its ban on retail investment in crypto ETNs on October 8, allowing retail investors to buy and hold these products within tax-free accounts [2] - The competition among issuers has intensified, leading to substantial fee reductions for bitcoin-linked products, with fees dropping to as low as 0.05% [1][4] Regulatory Changes - The FCA's decision marks a major policy shift, reflecting a changing attitude towards digital assets [2] - From April 6 next year, crypto ETNs will also qualify for the Innovative Finance ISA, further encouraging retail investment [3] Fee Reductions - Bitwise was among the first to respond to the regulatory changes, cutting its Core Bitcoin ETP fee from 0.2% to 0.05% for six months [4] - 21Shares and Fidelity also reduced their fees, with 21Shares lowering its Core Bitcoin and Ethereum Core Staking ETPs to 0.1% and Fidelity reducing its Physical Bitcoin ETP fee to 0.25% [4][5] - BlackRock entered the UK market with its European iShares Bitcoin ETP, offering a temporary fee reduction from 0.25% to 0.15% [5] Market Activity - CoinShares leads the ether segment with its Physical Staked Ethereum ETP, which has zero management fees, offsetting costs through staking rewards [6] - The trading activity for Bitcoin ETNs surged, with average daily trading volumes on the London Stock Exchange increasing from $2.1 million to $7.2 million after retail access resumed [8] Market Comparison - The current fee war in the UK mirrors the competitive landscape seen in the U.S. when crypto ETFs launched in early 2024, potentially making regulated funds a cheaper option for investors seeking bitcoin exposure [7]