As the regulator looks to loosen restrictions on ETNs, Brits are purchasing cryptocurrency to achieve their life goals

Ahead of the regulatory rule change that will take effect next week, investors are preparing to add cryptocurrency to their portfolios

As savers turn to cryptocurrency in anticipation of regulatory changes, it is anticipated to help increase pension pots, assist savers in purchasing real estate, and even finance a dream vacation.

Investors will be able to buy cryptocurrency exchange-traded notes (crypto ETNs) from UK providers whose products are listed on a regulated exchange starting next week (8 October), as the Financial Conduct Authority (FCA) will remove restrictions on these securities.

The FCA outlawed the marketing, distribution, and sale of derivatives and ETNs that make reference to unregulated transferable cryptoassets to retail customers in January 2021.

But now that the market has changed and is better understood, the regulator says it wants to give customers more options. Crypto is anticipated to be a significant component of portfolios, in addition to a variety of stocks, trusts, and top funds.

Crypto for your life objectives?

WisdomTree, a provider of exchange-traded products, stated that prior to the rule changes, interest in cryptocurrency ETNs had sharply increased. According to its survey of 3,000 adults, savers in the UK are thinking about putting up to 10% of their portfolio into cryptocurrency.

The primary motivation for investing in cryptocurrency was to increase disposable income (27 percent), which was followed by using it as part of a retirement plan (26 percent), to build emergency savings (22 percent), to take a vacation (21 percent), and to buy a home (21 percent).

In a different piece, we examine whether using cryptocurrency to increase your pension is a good idea.

According to WisdomTree's director of digital assets research, Dovile Silenskyte, "Most investors find it beneficial to have options and to see interest.

Although many people begin their cryptocurrency journey with Bitcoin because of its familiarity, she added, investors are now seeking a broader range of exposure to the market.

According to Silenskyte, most investors surveyed had reasonable long-term objectives, and exposure is a good thing "as long people do not panic buy or panic sell."

Silenskyte stated that "having a small crypto investment may work out relatively well" for people who intend to retire in twenty or thirty years. "Using cryptocurrency for a few years can make sense for people who want to buy a home because they need to save money for a deposit.

What is the appropriate amount to invest in cryptocurrency?

According to WisdomTree, most people can increase returns with little risk by investing a small percentage in cryptocurrency ETNs, such as 1% added to a diversified portfolio.

According to two out of five UK investors, if their bank, investment platform, or advisor provided access to the asset class, they would be more inclined to make an investment.

Retail investors will have access to UK-listed cryptocurrency exchange-traded products under a new regulation that goes into effect on October 8. However, consumers will not be offered any incentives to invest and will need to be aware of the risks involved. Additionally, they will not be covered by the Financial Services Compensation Scheme.

Whether they will be permitted to participate in an ISA in the future is still unknown.

WisdomTree stated that since investors are unable to purchase its products directly, they must use a brokerage or investment platform. Investors must pass suitability tests before they can buy cryptocurrency ETNs, and each platform will have its own questionnaires to gauge whether or not they fit the requirements.

WisdomTree's head of distribution for Europe, Adria Beso, stated: "We anticipate that investors will choose this as their preferred vehicle now that the FCA has allowed retail access to UK-listed cryptocurrency ETPs. Adoption will be heavily influenced by institutions, whether through platforms, advisers, or direct funding.

The company went on to say that there is a knowledge gap and that more crypto education is necessary.

Seventy-two percent of UK investors and savers say they don't know much about cryptocurrencies, and 31 percent say they wouldn't know what to do if prices dropped.

According to Silenskyte, "education is essential to helping investors use crypto sensibly and manage the ups and downs." "People can avoid taking on excessive risk and make decisions that support their long-term goals by knowing how cryptocurrency functions in a portfolio and how to respond when prices decline. Over time, small changes like consistent investing and creating balanced portfolios can have a significant impact.

In late 2024, about 12% of UK adults owned cryptocurrency, according to the FCA; by the end of 2025, this percentage is predicted to rise sharply.