Bitcoin ETNs in the UK: Which Ones Actually Hold the Coins?

Crypto Risk Warning

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.
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Important Legal Notice

This article is for information and educational purposes only.
It is not investment advice, investment research, or a financial promotion under Section 21 of the Financial Services and Markets Act 2000 (UK).
It does not recommend or invite anyone to buy, sell, or hold any cryptoasset or related product.

All information was verified as of 31 October 2025, but may change.
Cryptoasset ETNs are not covered by the Financial Services Compensation Scheme (FSCS) or the Financial Ombudsman Service.

The New Gateway for UK Investors

For most of its history, owning Bitcoin meant accepting a trade-off: freedom from banks in exchange for the constant anxiety of self-custody.
Now, the London Stock Exchange has given investors a halfway house Bitcoin Exchange-Traded Notes (ETNs) that let you track the price through a traditional brokerage account.

The list of issuers reads like a who’s who of finance: BlackRock’s iShares, Fidelity, WisdomTree, 21Shares, Bitwise, Invesco, CoinShares.
For the first time, a UK investor can buy Bitcoin exposure in an ISA or SIPP and see it settle alongside their FTSE 100 tracker.

But while these ETNs live on a regulated exchange, Bitcoin itself remains unregulated.
That’s the irony of crypto’s journey: a product designed to escape the financial system now sits neatly inside it.

ETN vs ETP: What’s the Difference, Really?

An Exchange-Traded Product (ETP) is the family name for listed securities that track an asset.
An ETN is a member of that family a note that mirrors an underlying price, in this case Bitcoin.

Because Bitcoin isn’t eligible for UCITS-compliant funds, the FCA only allows ETNs, not ETFs.
And even within that small world, there are two species:

1. Physically backed: one Bitcoin is held in cold storage for every note issued.

2. Synthetic: exposure is replicated through swaps or futures.

In practice, most of the ETNs on the LSE today are physically backed.
The difference isn’t academic; it determines whether real Bitcoin sits in custody or whether you just own a promise that behaves like it.

The ETNs Actually Trading on the LSE

Virtually all mainstream ETNs on the LSE are physically backed.
Each note represents Bitcoin held in cold storage by regulated custodians such as Coinbase Custody, Fidelity Digital Assets, Komainu, or Zodia.
Only the leveraged or inverse products use synthetic replication.

What Really Matters When Comparing Them

1. Fees are the obvious place to start.
   At the low end, iShares IB1T, Bitwise BTC3, and 21Shares CBTC charge around 0.20 % – 0.21 % per year, cheaper than most equity index funds.
   At the high end, legacy products from 21Shares or CoinShares still carry fees above 1 %, which is hard to justify in a world where custody costs have fallen and transparency has improved.

2. Custody quality is the second pillar.
   Fidelity, BlackRock and Bitwise all use large, audited custodians.
   For a product whose entire premise is to hold Bitcoin safely, that’s not trivial.

3. Liquidity is the third consideration.
   Newer, low-fee products like IB1T and BTC3 are already trading with healthy volumes and narrow spreads, making them easy to enter or exit without large price impact.

Market Overview

The rise of physically backed ETNs shows how quickly the Bitcoin narrative has matured.
What began as a rebellion against intermediaries has now been reconstructed into something institutional investors can actually hold.
For many, that defeats the purpose; for others, it’s the only way to make Bitcoin investable.

Fees have compressed, custody has professionalised, and reporting has become routine.
Today’s market offers options that are regulated, transparent, and relatively low-cost, though still high-risk and speculative by any reasonable standard.

Key Risks and Regulatory Disclosures

• Bitcoin ETNs and ETPs are high-risk cryptoasset investments that may result in a total loss of capital.

• They are not protected by the FSCS and lie outside FCA prudential oversight.

• Prices are highly volatile and can move sharply in short periods.

• These products are issued and regulated under EU or Swiss frameworks (BaFin, FINMA), not directly by the UK FCA.

• Past performance is not a reliable indicator of future results.

• Investors should review each issuer’s Prospectus and Key Information Document (KID) before trading.

Portfolio Parrot Perspective

Physically backed Bitcoin ETNs such as IB1T (iShares), CBTC (21Shares), and BTC3 (Bitwise) offer the cleanest way for UK investors to track Bitcoin’s price on a regulated exchange.
They have the transparency and oversight that early crypto never did, but they also come stripped of the romance that first drew people to it.

In the end, Bitcoin’s move into the financial mainstream says less about crypto and more about markets:
Given enough demand, even rebellion can be securitised.

Disclaimer: This publication is for general information and educational purposes only and should not be taken as investment advice. It does not take into account your individual circumstances or objectives. Nothing here constitutes a recommendation to buy, sell, or hold any investment. Past performance is not a reliable indicator of future results. Always do your own research or consult a qualified financial adviser before making investment decisions. Capital is at risk.