Market Overview - Bitcoin is currently priced around $111,000, with a 2% decline in the last 24 hours, reflecting a cautious but stable outlook amid the U.S.-China trade war impacting investor risk appetite [1] - The broader crypto market experienced a 3.8% decline, following a significant $500 billion crash last week, indicating a fragile recovery [2] Market Sentiment - Analysts suggest the recent market decline is a controlled deleveraging rather than a panic sell-off, supported by stable funding rates and modest outflows [3] - Traders are optimistic about market stabilization, as evidenced by numerous short straddles and diagonal calls clustered around the $113,000 to $115,000 range, along with downside protection through put calendars at $112,000 [4] Correlation with Gold - Bitcoin's price correlation with gold has reached 0.9, the highest in years, indicating that investors are increasingly viewing Bitcoin as a hedge during geopolitical or economic stress [4] Institutional Activity - Analysts at QCP Capital note that a setup for a renewed rally may be forming due to continued institutional treasury accumulation and steady inflows into spot exchange-traded products [5] Upcoming Events - A series of significant events are scheduled, including the launch of OpenxAI's public mini app builder and the listing of OwlTing on Nasdaq, which may influence market dynamics [5]

Core Viewpoint - Hargreaves Lansdown warns that bitcoin should not be considered a core part of investment portfolios, despite preparing to offer crypto products to clients for the first time [1][2] Group 1: Investment Perspective - The company states that bitcoin is not an asset class and lacks intrinsic characteristics justifying its inclusion in growth or income portfolios [1] - Hargreaves Lansdown highlights the cryptocurrency's price history, which includes periods of extreme losses, making performance assumptions difficult to analyze [2] - The firm emphasizes that bitcoin should not be relied upon to help clients meet their financial goals [2] Group 2: Regulatory Context - The UK's Financial Conduct Authority (FCA) has lifted a nearly four-year ban on crypto exchange-traded notes (ETNs) for retail investors, allowing Hargreaves Lansdown to proceed with its plans [2] - The FCA will permit only crypto ETNs that are physically backed by bitcoin or ether and listed on a Recognised Investment Exchange (RIE) [4] - These regulations aim to ensure that crypto products adhere to the same disclosure, transparency, and investor-protection standards as traditional securities [4] Group 3: Client Engagement and Offerings - Hargreaves Lansdown plans to develop a "balanced client journey" over several months, which includes detailed risk warnings and an appropriateness assessment for clients before investing [3] - Clients who qualify will face a 10% portfolio cap on crypto exposure in accordance with FCA rules [3] - The firm anticipates launching access to crypto ETNs in early 2026, with offerings likely to include pound-denominated, physically backed products from issuers such as 21Shares, CoinShares, and WisdomTree [5]

Core Viewpoint - Hargreaves Lansdown has warned U.K. investors against heavily investing in cryptocurrencies despite the FCA lifting its ban on crypto exchange-traded notes (ETNs) for retail investors [1][2][6]. FCA Lifts Ban on Crypto ETNs - On October 8, the FCA lifted its 2021 ban on the sale of crypto ETNs to retail investors, allowing recognized investment exchanges to list these products again [2][3]. - Crypto ETNs are debt instruments that mirror the price of digital assets like Bitcoin and Ethereum, providing exposure to cryptocurrencies without direct ownership [3]. Warnings Against Crypto - Hargreaves Lansdown stated that Bitcoin has "no intrinsic value" and does not believe cryptocurrencies should be included in portfolios for growth or income [4][6]. - The firm emphasized that cryptocurrencies should not be relied upon to meet long-term financial goals [6]. Industry Response - Hargreaves Lansdown has taken a strict stance compared to other investment firms following the ban lift, remaining cautious about offering regulated crypto products [5][6]. - Rival platforms Saxo and Interactive Investor plan to offer cETNs soon, while Hargreaves Lansdown will assess risks associated with cETNs and expects to allow limited customer access from early next year [6][7].

Core Insights - The UK's Financial Conduct Authority (FCA) has lifted a four-year ban on the sale of crypto-linked exchange-traded notes (ETNs) to retail investors, marking a significant shift in regulatory stance towards crypto investment products [1][3][7] - This decision aligns the UK more closely with other European markets where such products have been available for a longer period [2] Regulatory Changes - The FCA's reversal of its 2021 decision allows recognized investment exchanges to list crypto ETNs for all investors, which are debt securities tracking the prices of cryptocurrencies like Bitcoin and Ethereum [3][4] - The FCA's Executive Director of Payments and Digital Finance noted that the market has evolved, with products becoming more mainstream and better understood since the initial restrictions [4] Market Demand - There is a growing appetite for regulated crypto exposure among UK investors, particularly among younger demographics, with a survey indicating that 30% of adults are open to investing in crypto ETNs, rising to 50% among those aged 18-24 [5][6] - A 2024 FCA survey revealed that only 12% of Britons currently hold crypto assets, with average holdings around £1,842, suggesting significant potential for growth in this market segment [6] Industry Reaction - The lifting of the ban has been welcomed by the UK crypto industry, which sees it as a regulated route for ordinary investors to gain exposure to digital assets without directly holding them [7][8] - Industry leaders express optimism that this development reflects the regulator's recognition of growing investor appetite and the potential of the crypto sector [8]

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 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]