FCA Opens Retail Access to Crypto ETPs in UK

FCA Clears Path for Retail Crypto ETPs in UK

The UKs Financial Conduct Authority (FCA) has approved retail access to listed crypto exchange-traded products (ETPs), marking a pivotal shift for everyday investors. The move aligns the UK with European markets, where such products have been available for years.

Speaking on the Investing, Markets & Money podcast, Stuart Fieldhouse interviewed Dovile Silenskyte of WisdomTrees Digital Assets team to unpack the implications. Silenskyte highlighted that WisdomTree has managed crypto ETPs in Europe for more than five years, offering both single-asset and diversified basket products. Until now, UK retail investors were excluded, with access limited to institutions.

Silenskyte emphasized the advantages of ETPs over direct crypto ownership. Investors avoid the risks of managing private keys or facing exchange hacks, as custody, insurance, and cold storage are handled by professional custodians. All WisdomTree products are fully physically backed, with underlying assets stored in segregated cold wallets.

She explained that while crypto ETPs differ from UCITS ETFs due to concentration limits, they share similar features in terms of transparency and trading. Importantly, she contrasted physically backed products with synthetic, futures-based structures, noting that the latter can suffer from “roll costs” that erode returns.

WisdomTrees Ethereum ETP also integrates staking, offering yield potential. Risks such as liquidity constraints and slashing are mitigated through insurance and conservative staking practices.

The FCAs decision comes ahead of confirmation that crypto ETPs will soon qualify for inclusion in ISAs and SIPPs, a development Silenskyte argued should place them on par with gold ETFs. For portfolio allocation, she suggested a modest 2% exposure to digital assets as a “market-cap neutral” entry point.

Her closing message underscored the broader significance: crypto ETPs provide a safer, regulated, and more accessible route for retail investors to participate in digital assets—without the operational hurdles of wallets or exchanges.