Crypto ETPs in Europe: What’s Changed in 2026

In October 2025, the UK FCA allowed retail investors to access crypto ETNs, provided they were traded on a UK-based recognized investment exchange. This marked a reversal of the FCA’s January 2021 ban, which had prohibited retail access to such products. 

However, the FCA still restricts retail access to crypto asset derivatives. These products are financial contracts that can provide leveraged price exposure to an asset. 

Retail investors can access crypto ETNs, provided they are traded on a UK-based recognized investment exchange. There are currently five recognized investment exchanges (RIE): ICE Futures Europe, London Stock Exchange, London Metal Exchange, Aquis Stock Exchange, and Cboe Europe. 

The FCA requires crypto ETNs to meet the following criteria to be admitted for trading on an RIE: 

• The underlying asset must be either bitcoin or ether.
• Products must be physically backed by the underlying cryptocurrency.
• Crypto assets must be held in cold storage (that is, offline) or an equivalent secure arrangement and must be safeguarded by one or more regulated custodians.

When retail access opened in October 2025, investors could hold cETNs inside both adult and junior stocks and shares ISAs. 

However, from the start of the 2026/27 UK tax year, on April 6, 2026, cETNs no longer qualify for inclusion in stocks and shares ISAs but instead will be eligible for innovative finance ISAs. 

Self-invested personal pensions also became eligible to hold cETNs from October 2025, but HMRC has not announced any change to the treatment of cETNs in pensions. 

Individuals who held cETNs in adult or junior stocks and shares ISAs before April 6 will be able to retain these holdings in their accounts. 

There are four types of ISAs for adults:  

• Cash ISAs
• Stocks and shares ISAs
• Innovative finance ISAs
• Lifetime ISAs

Individuals under 18 can access junior cash ISAs and stocks and shares ISAs. 

In any type of ISA, investors do not need to pay tax on interest earned from cash nor on an investment’s income or capital gains. 

Launched in 2016, innovative finance ISAs are designed to support more long-term, less-liquid investments and cash, including: 

• Peer-to-peer loans
• Crowdfunding debentures
• Alternative finance arrangements
• Less-liquid investments
• Cash

IF ISAs are significantly less popular than other ISA types. IF ISAs accounted for about 0.09% of the total number of adult ISA accounts in the 2023-24 tax year. 

Platforms that do offer IF ISAs typically focus on peer-to-peer lending or crowdfunding, and currently no UK platform offering the IF ISA is also authorized to sell crypto ETNs. 

Investor demand for crypto ETPs peaked in September 2025, with over EUR 1 billion in net inflows.

Since then, flows have slowed as major cryptocurrencies, including bitcoin, have experienced a drawdown. European crypto ETPs’ total assets have nearly halved since their peak in October 2025, decreasing from EUR 19 billion to EUR 11 billion as of February 2026. 

European ETPs can be classified into four categories:¹ 

• Bitcoin exposure
• Ether exposure
• Alternative cryptocurrencies
• Diversified basket products.

Products with multi-crypto exposure are considered basket products. Although the majority of ETPs by number fall into the alternatives category, the majority of assets are concentrated in single-exposure bitcoin products. 

As of February 2026: 

• CoinShares, 21shares, and WisdomTree lead by assets under management.
• Valour offers the highest number of crypto ETPs, with 87 products.
• The largest ETPs by assets are CoinShares Bitcoin ETP, WisdomTree Physical Bitcoin, and iShares Bitcoin ETP.

Source: Morningstar Direct. Data as of March 13, 2026. 

The majority of European crypto ETPs have launched in the past five years. The strongest year for openings was 2025, with just over 80 products launched. So far in 2026 (through the end of February), six crypto ETPs have been launched. 

2023 was the worst year for existing ETPs with 21 closures, driven by low investor demand and firms consolidating operations during tougher market conditions. In 2025, seven crypto ETPs closed, while only one closed over the first two months of 2026. 

Crypto represents the most extreme risk/reward trade-off compared with other core assets like equities. 

Over the 10-year trailing period ended February 2026, bitcoin and ether delivered impressive annualized returns—but with significantly high volatility at around 75% and 136%, respectively, compared with traditional assets. For instance, for emerging-market stocks, it was 13%. 

Over the trailing one-year period ending February 2026, bitcoin and ether fell about 30% and 23%, respectively, reflecting the major cryptocurrency drawdown that began in October 2025.  

Even small allocations to cryptocurrency can significantly amplify a portfolio’s overall risk and return profile. This can work in favor of or against investors, who need to be willing to stomach wild swings. 

Across all four product types, volatility remains high. Bitcoin and Basket products typically delivered strong returns, while Ether and Alts products have struggled to compensate investors for their high risk. 

Bitcoin products have the highest return per unit of risk. Conversely, the alternative cryptocurrency group, on average, was the most volatile over the past three years, with the lowest risk-adjusted and absolute returns.  

Source: Morningstar Direct. Data as of March 13, 2026. 

The average annual fee for digital-asset ETPs is 1.63%. This figure is elevated by the inclusion of complex alternative cryptocurrency ETPs, which typically carry higher fees than bitcoin-focused products. Conversely, bitcoin ETPs have the lowest fees, followed by ether, as both have become relatively vanilla commodified exposures offered by multiple providers. 

One advantage of crypto ETPs is their fees are typically transparent, whereas direct crypto ownership can often involve varying transaction costs and less visible fees. 

Cryptocurrencies have shown extreme volatility and significant drawdown risk. While longer-term returns—particularly for leading crypto assets such as bitcoin and ether—have historically been strong enough to compensate for that risk, it’s uncertain whether this pattern will continue. Unlike traditional asset classes like equities or bonds, which can be valued by discounting future cash flows, estimating the fair value of cryptocurrencies is inherently more challenging. 

Within a traditional 60/40 portfolio, allocations above 5% introduce a high degree of uncertainty. At higher weights, cryptocurrencies can disproportionately increase overall volatility and materially alter the portfolio’s risk profile.  

In terms of holding period, Morningstar’s Role in Portfolio framework suggests a minimum investment horizon of 10 years. This guidance reflects historical analysis of loss frequencies across rolling periods from one to 10 years, alongside typical recovery times following drawdowns. 

Investors have several options for gaining exposure to cryptocurrencies, including via exchange-traded products. The cETNs that meet FCA requirements offer ease of access alongside a degree of regulatory oversight that direct ownership of crypto assets does not provide. 

One of the main benefits of holding cETNs within tax-advantaged wrappers, such as ISAs or self-invested personal pensions, is that any capital gains or income are sheltered from tax and do not require reporting. By contrast, the cETNs held outside these wrappers are subject to capital gains tax. Direct crypto holdings are also subject to capital gains tax and, in some cases, income tax, and may require self-reporting. 

While the most established cryptocurrencies, bitcoin and ether, have delivered strong long-term historical returns, those returns have come with extreme volatility. For that reason, cryptocurrency allocations should remain a relatively small part of a diversified portfolio.