Core Viewpoint - The partnership between 21Shares and Stratiphy marks a significant shift in the UK's regulatory stance on digital assets, allowing retail investors regulated access to crypto Exchange Traded Notes (ETNs) for the first time [1][2]. Group 1: Partnership and Product Offering - 21Shares has partnered with UK wealth management app Stratiphy to enable retail investors to buy and hold crypto ETNs following the Financial Conduct Authority's (FCA) lifting of its four-year ban on these products [1]. - Stratiphy will be the first UK wealth manager to list 21Shares' products, which include physically backed Bitcoin and Ethereum ETNs [2]. Group 2: Market Context and Demand - The FCA's decision represents a significant change in the UK's approach to digital assets, with 12% of UK adults already holding cryptoassets through largely unregulated platforms [4]. - Investor demand for digital assets is increasing, as highlighted by Daniel Gold, CEO of Stratiphy, who noted that this partnership will provide regulated access to crypto as soon as FCA approval is effective [3]. Group 3: Financial Performance and Growth - 21Shares manages over $11 billion in assets across 50 crypto exchange-traded products listed in Europe, with €26 billion worth of crypto ETPs traded on European exchanges in 2024, reflecting a 300% increase from the previous year [3]. - The regulated nature of these ETNs is expected to make them eligible for inclusion in ISA and SIPP portfolios, providing tax-efficient exposure to cryptoassets [5].

Core Insights - The UK Financial Conduct Authority (FCA) is set to lift a ban on crypto exchange-traded notes (ETNs), potentially unlocking nearly $1 trillion in British savings accounts for crypto investment [1][2] - This regulatory change could position the UK as a significant player in the global crypto market, especially if crypto assets are confirmed for individual savings accounts and self-invested personal pension accounts [3][4] Regulatory Changes - The FCA's ban on the sale, marketing, and distribution of derivatives and ETNs referencing unregulated crypto assets to retail investors was enacted in January 2021 and will be reversed on October 8, 2023 [2] - A parliamentary group has begun working on cryptocurrency legislation following a year-long hiatus, and the FCA has opened a consultation on proposed crypto rules [6] Market Potential - UK residents held over $930 billion in assets through individual savings accounts (ISAs) and self-invested personal pension accounts (SIPPs) as of 2023, indicating a substantial market for crypto investments [4] - A survey by Norstat revealed that 30% of 2,500 UK investors would consider investing in crypto via ETNs, a significant increase from the 12% of UK residents who owned crypto as of November 2024 [7] Industry Response - Freetrade, a UK-based fintech platform, is awaiting final guidance from HMRC regarding the eligibility of crypto ETNs for tax-advantaged accounts, with expectations that Bitcoin and Ethereum ETNs will be available [5]