UK Crypto ETN Price War Intensifies After Retail Return

Retail investors can now buy and hold London-listed crypto ETNs, which track the price of cryptocurrencies such as bitcoin and ether, within tax-free accounts like stocks-and-shares ISAs for the current tax year.

From April 6 next year, these products will also qualify for the Innovative Finance ISA. The decision immediately sparked intense competition among issuers.

Who Wins the Fee War After the FCA Opens the Door to Retail Crypto ETNs?

Bitwise, one of the first to react, slashed the annual fee for its Core Bitcoin ETP from 0.2% to 0.05%, effective for six months “and continuing until further notice.”

The cut undercut 21Shares, which responded by reducing fees for its Core Bitcoin and Ethereum Core Staking ETPs to 0.1%.

Fidelity soon followed, lowering charges on its Physical Bitcoin ETP to 0.25%, while Invesco trimmed its equivalent product to 0.1% until the end of 2025.

BlackRock, which dominates the U.S. crypto ETF market through its $92 billion iShares Bitcoin Trust, entered the UK race by listing its European iShares Bitcoin ETP in London.

The firm offered a temporary discount, reducing fees from 0.25% to 0.15% until January. Meanwhile, CoinShares continues to lead the ether segment with its Physical Staked Ethereum ETP, the only exchange-traded product in Europe with zero management fees.

CoinShares offsets costs using staking rewards generated from locked ether.

Will London’s Crypto ETN Boom Mirror the U.S. ETF Frenzy?

The new fee war mirrors the aggressive competition seen in the United States when crypto ETFs launched in early 2024.

Analysts say the cuts could make it cheaper for investors to gain bitcoin exposure through regulated funds than through most traditional investment vehicles.

Some crypto ETNs previously available only to professionals still charge as much as 2.5% annually, highlighting the growing divide between older products and new, low-cost entrants.

Trading activity surged immediately after retail access resumed. According to data from Bitwise, average daily trading volumes for Bitcoin ETNs on the London Stock Exchange jumped to $7.2 million from $2.1 million earlier in October, when only professional investors were eligible.

Ether ETNs saw similar momentum, rising from $1.9 million to $4.4 million. Morningstar data shows that WisdomTree’s Physical Bitcoin and Ethereum ETNs have seen the highest turnover since the relaunch, followed closely by iShares products.

“The surge in activity reiterates the exceptional level of appetite for exposure to these assets,” said Russell Barlow, chief executive of 21Shares.

Market analysts expect competition to further expand product diversity and reduce costs for investors as more issuers enter the UK market.

FCA Warns Issuers on Incentives as Younger Investors Drive Interest

Still, the FCA has urged caution. In a statement this week, the regulator warned issuers not to offer incentives to attract investors and to carry out strict appropriateness assessments.

Firms must provide cooling-off periods and clear risk warnings, reinforcing that crypto ETNs remain high-risk instruments not covered by the Financial Services Compensation Scheme.

While platforms such as Interactive Investor, Trading 212, Killik & Co., and Interactive Brokers have begun allowing retail access, others, including major investment brokers Hargreaves Lansdown and AJ Bell, have yet to offer crypto ETNs.

Hargreaves Lansdown has taken a notably skeptical stance, warning clients against adding Bitcoin to their portfolios and calling it “not an asset class.” Despite the caution, the firm said it plans to enable trading for “appropriate clients” in early 2026.

The FCA’s decision to open the market marks a turning point for the UK’s crypto sector, long criticized for its slow regulatory progress.

The regulator has recently accelerated crypto firm approvals, increasing its acceptance rate to 45% and granting licenses to institutions such as BlackRock and Standard Chartered.