Hargreaves Lansdown, a prominent UK retail investment platform, is set to introduce cryptocurrency-related products in early 2026. This move comes after the Financial Conduct Authority (FCA) lifted its nearly four-year ban on crypto exchange-traded notes (ETNs) for retail investors, effective October 8, 2025. While the platform has historically been cautious about cryptocurrencies, acknowledging client interest, it aims to provide access to physically backed Bitcoin and Ethereum ETNs.
The platform's strategy emphasizes investor protection and education. Clients interested in crypto ETNs will undergo a mandatory appropriateness assessment to ensure they understand the risks and have suitable financial profiles. Even then, crypto investments will be capped at no more than 10% of a client's overall portfolio to prevent overexposure to this high-risk asset class. The ETNs will be denominated in pound sterling and offered through reputable issuers like 21Shares, CoinShares, and WisdomTree, tracking Bitcoin and Ethereum without requiring direct ownership or management of wallets.
Hargreaves Lansdown has consistently warned about the volatility and speculative nature of cryptocurrencies like Bitcoin, stating they should not be a core part of an investment portfolio. For instance, Bitcoin's price surged to nearly $69,000 in 2021 before falling below $20,000 the following year, illustrating its extreme price swings. Despite these warnings, the firm is preparing for several months of preparation to align with new regulatory standards and implement internal safeguards for the launch, aiming for a "balanced client journey."
The FCA's decision to lift the ban on crypto ETNs is significant, aligning the UK more with jurisdictions like the US, where spot Bitcoin ETFs have been available since early 2024. The FCA requires ETNs to be physically backed by Bitcoin or Ether and listed on approved exchanges, ensuring transparency and security. This aims to bring digital assets into regulated finance and offer retail investors products with similar disclosure and protection as traditional securities. The broader implications include potential growth in the UK's crypto market, estimated to expand by up to 20% with these launches.
However, investors face tax considerations, as gains from crypto ETNs are subject to capital gains tax in the UK, with rates up to 20% depending on income brackets. Hargreaves Lansdown advises investors to diversify broadly, treating crypto as a small part of a balanced portfolio, and to stay informed about regulatory updates and market conditions. The platform's measured approach reflects a balance between innovation and investor prudence as the digital asset market evolves.
