- Commission-free stock trades
- Receive dividend payments
- Invest in fractional shares
Alternatives to Bitcoin ETFs
Bitcoin ETFs aren't available in the UK yet, but we've listed plenty of other ways to invest in Bitcoin.
Estimated reading time: 2 min
Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.
What are the key risks?
1. You could lose all the money you invest
- The performance of most cryptoassets can be highly volatile, with their value dropping as quickly as it can rise. You should be prepared to lose all the money you invest in cryptoassets.
- The cryptoasset market is largely unregulated. There is a risk of losing money or any cryptoassets you purchase due to risks such as cyber-attacks, financial crime and firm failure.
2. You should not expect to be protected if something goes wrong
- The Financial Services Compensation Scheme (FSCS) doesn't protect this type of investment because it's not a 'specified investment' under the UK regulatory regime – in other words, this type of investment isn't recognised as the sort of investment that the FSCS can protect. Learn more by using the FSCS investment protection checker.
- The Financial Ombudsman Service (FOS) will not be able to consider complaints related to this firm or Protection from the Financial Ombudsman Service (FOS) does not cover poor investment performance. If you have a complaint against an FCA regulated firm, FOS may be able to consider it. Learn more about FOS protection here.
3. You may not be able to sell your investment when you want to
- There is no guarantee that investments in cryptoassets can be easily sold at any given time. The ability to sell a cryptoasset depends on various factors, including the supply and demand in the market at that time.
- Operational failings such as technology outages, cyber-attacks and comingling of funds could cause unwanted delay and you may be unable to sell your cryptoassets at the time you want.
4. Cryptoasset investments can be complex
- Investments in cryptoassets can be complex, making it difficult to understand the risks associated with the investment.
- You should do your own research before investing. If something sounds too good to be true, it probably is.
5. Don't put all your eggs in one basket
- Putting all your money into a single type of investment is risky. Spreading your money across different investments makes you less dependent on any one to do well.
- A good rule of thumb is not to invest more than 10% of your money in high-risk investments.
If you are interested in learning more about how to protect yourself, visit the FCA's website here.
For further information about cryptoassets, visit the FCA's website here.
A US financial watchdog approved spot Bitcoin ETFs in January 2024 – these are ETFs which hold Bitcoin itself. But the UK financial regulator has blocked this for UK investors so far. Our experts have put together some alternative options for investing in Bitcoin, for the crypto curious.
Alternative ways to invest in Bitcoin
Here are several alternative ways to invest that you may want to consider:
- Investing in Bitcoin directly. If you want to buy Bitcoin, rather than using a fund, you can use a crypto exchange to buy or sell Bitcoin. But after recent troubles with some exchanges, you might want to look at using a wallet to store your Bitcoin once you’ve bought it.
- Bitcoin mining stocks. A key part of the Bitcoin ecosystem is the miners. There’s a handful of Bitcoin miners publicly trading on major stock exchanges in the UK and the US. Examples include Argo Blockchain (ARB), Riot Platforms (RIOT) and Stronghold Digital (SDIG).
- Stocks holding Bitcoin. Some firms hold (or “hodl”) Bitcoin on their balance sheets. So you can get indirect exposure to the price of Bitcoin without investing in the cryptocurrency yourself. Popular stocks include Tesla (TSLA), MicroStrategy (MSTR) and crypto exchange Coinbase (COIN).
- Cryptocurrency and blockchain ETFs. Another possibility is using a crypto ETF that’s already trading in the UK. These ETFs invest in a selection of crypto and blockchain stocks, rather than the digital assets themselves. A couple of examples are the VanEck Crypto and Blockchain Innovators UCITS ETF (DAGB) and the iShares Blockchain Technology UCITS ETF (BLKC).
Keep in mind that stocks related to Bitcoin, and crypto in general, are considered high risk due to the price volatility in the crypto market.
- 13,000+ shares to invest in
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Will Bitcoin ETFs be approved in the UK?
As of January 2024, the Financial Conduct Authority (FCA) continues to ban access to crypto ETFs for UK retail investors. New rules which came into force in October 2023 classed Bitcoin and other cryptocurrencies as “restricted mass market investments”.
The regulator is concerned about the extreme volatility of crypto and the difficulties retail investors face in valuing spot crypto ETFs.
As a result, it has blocked spot crypto ETFs and it seems there are no plans to approve them any time soon in the UK.
Jason Hollands, managing director at DIY investing platform Bestinvest, says: “Even were Bitcoin or cryptocurrency ETFs to become authorised in the UK in the near future, it is possible that these would be primarily accessible for professional investors such as discretionary fund managers or those certified as sophisticated investors.”
Can UK Bitcoin holders invest in Bitcoin ETFs?
Not right now. But if you’re already invested in Bitcoin and holding the digital asset, you would be doubling up if you were to own Bitcoin cryptocurrency and a spot Bitcoin ETF. Typically, people would be looking to do one or the other (unless there were tax advantages).
Part of the reason the spot Bitcoin ETFs were created was to make investing in Bitcoin more accessible to those who are used to more traditional methods of investing in financial assets. If you’re someone who’s savvy enough to buy and hold Bitcoin yourself, you may not even want to use an ETF as an alternative ownership option.
What Bitcoin ETFs were approved by the SEC?
Here’s a list of the 11 spot Bitcoin ETFs that were recently given the green light by the SEC, try and spot the tongue-in-cheek stock ticker symbols:
|ARK 21Shares Bitcoin ETF (ARKB)
|Bitwise Bitcoin ETF (BITB)
|Blackrock iShares Bitcoin Trust (IBIT)
|Franklin Bitcoin ETF (EZBC)
|Fidelity Wise Origin Bitcoin Trust (FBTC)
|Grayscale Bitcoin Trust (GBTC)
|Hashdex Bitcoin ETF (DEFI)
|Invesco Galaxy Bitcoin ETF (BTCO)
|VanEck Bitcoin Trust (HODL)
|Valkyrie Bitcoin Fund (BRRR)
|WisdomTree Bitcoin Fund (BTCW)
If you want to invest in Bitcoin but don’t want to buy it directly, there are several alternatives. But before you jump in, it’s worth asking yourself if hype is affecting your decisions.
Frequently asked questions
Cryptocurrencies are speculative and investing in them involves significant risks - they're highly volatile, vulnerable to hacking and sensitive to secondary activity. The value of investments can fall as well as rise and you may get back less than you invested. Past performance is no guarantee of future results. This content shouldn't be interpreted as a recommendation to invest. Before you invest, you should get advice and decide whether the potential return outweighs the risks. Finder, or the author, may have holdings in the cryptocurrencies discussed.
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