From 8 October, 2025, UK retail investors will have access to a number of cryptocurrencies via ETNs, or Exchange-Traded Notes, sometimes referred to as Exchange-Traded Products, or ETPs.

What is a Crypto ETN?

• Exchange-Traded Note (ETN): A type of unsecured debt security issued by a bank or financial institution that trades on a stock exchange, similar to an Exchange Traded Fund, or ETF.

• Crypto ETNs: Track the performance of a specific cryptocurrency (like Bitcoin or Ethereum), or a basket of digital assets, without requiring investors to hold the coins directly.

• Structure: They don’t own the underlying crypto. Instead, they promise to pay the return of the crypto asset (minus fees).

How They Work

• Issuer-backed: You buy a note from an issuer (e.g., 21Shares, CoinShares, WisdomTree).

• Market-traded: Listed on stock exchanges (such as Xetra, SIX Swiss Exchange, London Stock Exchange).

• Exposure: Provide access to crypto prices without wallets, private keys, or unregulated exchanges.

Pros of Crypto ETNs

Accessible: Tradeable through traditional brokerage accounts, just like shares or ETFs.
Regulated environment: Listed on mainstream exchanges under financial supervision, offering more investor protection compared to offshore crypto exchanges.
No custody issues: Avoids dealing with private keys, digital wallets, and security risks of self-storage.
Diversification options: Some ETNs track single coins (BTC, ETH), others baskets or thematic indices.
Tax efficiency: Easier reporting than direct crypto holdings and can be included in your ISAs.

Cons of Crypto ETNs

Credit risk: ETNs are debt instruments. If the issuer defaults, investors may lose money regardless of crypto performance. ETNs do not benefit from Financial Services Compensation Scheme (FSCS) protection.
No ownership: You don’t hold the actual cryptocurrency, though some of the ETNs are classified as ‘staking’, which means they can earn a yield to offset feeds.
Fees: Management fees (often 1–2% annually) erode returns, especially versus direct holding.
Tracking risk: Some ETNs may not perfectly match the spot price due to costs and structure.
Volatility: Crypto assets themselves are highly volatile—ETNs amplify exposure to that volatility.
Regulatory uncertainty: Crypto regulations are evolving; future rules could affect ETNs’ availability or costs.

Other Considerations

• Terminology: Many issuers and venues label these as Exchange Traded Products ETPs but the legal wrapper is typically an ETN (debt). Exchange pages (e.g., Xetra/Euronext) often show “Type: ETN” even when marketing calls them ETPs. Check docs if structure matters for you. 

• Staking ETPs (ETH): Products like 21Shares AETH/ETHC, Bitwise ET32, CoinShares CETH, and Valour 1VET accrue staking rewards inside the note (net of service fees). Yields vary, and staking introduces extra risks.

• Fees: Headline OCF/TERs differ widely—from 0.15–0.35% (WisdomTree BTC, Fidelity BTC, Invesco BTC) to ~1.49% on some legacy lines; Bitwise and Global X also run low-cost “core” lines. Global X temporarily waived fees to 0% through 3 Jan 2025 before reverting to 0.29%. Always verify the latest KID. 

• Custody transparency: Several issuers highlight institutional custody and public reserve attestations (e.g., CoinShares uses Komainu and publishes real-time reserves). 

Summary

Crypto ETNs are a convenient, regulated way to gain exposure to digital assets via traditional markets. They simplify access and remove custody risks but carry issuer credit risk, higher fees, and lack the flexibility of owning crypto directly. For many retail investors, they act as a stepping stone into crypto markets—but they’re not a perfect substitute for holding the assets themselves.

Can I invest in crypto ETNs at Saxo?

Yes, in addition to being available for traders and general investing accounts, you will be able to add these ETNs to your existing stocks and shares ISA and SIPP accounts, subject to passing the relevant appropriateness test within the platform.

Click here to see the available ETNs at Saxo.

Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you are unlikely to be protected if something goes wrong.