Core Insights - The U.K. will allow asset managers to offer crypto exchange-traded notes (ETNs) to retail investors starting October 8, 2023, lifting a ban that has been in place since 2021 [1][8] - A survey indicates that 50% of U.K. investors aged 18-24 are open to investing in crypto ETNs, reflecting strong demand among younger investors [1][4] Industry Developments - The lifting of the FCA embargo on crypto ETNs provides access to the London Stock Exchange, one of the largest securities exchanges globally [2] - Blackrock is expected to be among the first to list a Bitcoin ETN in London, with other firms like Bitwise, WisdomTree, and 21Shares likely to follow [2] Investor Sentiment - The IG survey shows that 30% of adults in the U.K. are open to investing in crypto ETNs, with the figure rising to 50% for those aged 18-24, significantly higher than the current crypto ownership rate of approximately 12% [4] - The average value of crypto holdings among U.K. investors is reported to be £1,842 [4] Tax Considerations - The potential tax advantages of investing in regulated crypto products may attract investors, as deposits in stocks and shares ISAs can be sheltered from capital gains tax up to £20,000 per year [6] - Self-Invested Personal Pension (SIPP) accounts also offer government contributions that can offset income tax, making them appealing for crypto investments [6] Key Advantages - Among those likely to invest in crypto ETNs, 19% cited the ability to hold crypto within tax-efficient wrappers as a significant advantage [9]

Core Insights - BlackRock is preparing to list its iShares Bitcoin ETP (BTCN) on the London Stock Exchange following a rule change by the FCA that will allow crypto exchange-traded notes (ETNs) starting October 8 [1][3] - The rule change will enable U.K. retail investors to purchase ETNs that track Bitcoin, coinciding with Bitcoin's price surpassing $114,000 [2][3] Regulatory Changes - The FCA's rule change marks the end of a ban on crypto ETNs that was imposed in January 2021, allowing retail investors to access these financial instruments [3][7] - ETNs are debt securities that track the price of underlying crypto assets like Bitcoin, differing from ETFs in that investors hold a claim on the issuer rather than the fund itself [3][7] Market Impact - Other firms such as Bitwise, WisdomTree, and 21Shares are also utilizing the ETN format to offer Bitcoin-tracking products on the London Stock Exchange, but these are currently limited to qualified investors [5][7] - The lifting of the retail ban is seen as a significant development for integrating digital assets into the financial system, although firms have not confirmed plans to expand retail access [5][6] Comparison with ETFs - The rule change does not permit the introduction of Bitcoin ETFs in the U.K. due to the UCITS framework, which imposes diversification rules that complicate the structuring of such funds [4][3] - Under UCITS, ETFs must adhere to the 5/10/40 rule, limiting investment in a single issuer and overall exposure [4] Current Availability - BlackRock's BTCN is already available to retail investors in several European countries, including France, Germany, the Netherlands, and Switzerland [8]