Eric Balchunas expresses skepticism over FCA crypto ETN plans
Eric Balchunas sees low UK ETF impact
The UK’s Financial Conduct Authority (FCA) is planning to ease restrictions on cryptocurrency investments by proposing the removal of its long-standing ban on crypto exchange-traded notes (ETNs) for retail investors.
The proposal would allow individual investors to trade crypto ETNs listed on FCA-recognized exchanges — a move widely seen as part of the country’s effort to align with international trends in the digital asset sector.
Despite the regulatory shift, Bloomberg ETF Senior Analyst Eric Balchunas remains cautious about its potential impact. In a post on the X platform (formerly Twitter), he wrote: “UK lifting ban on crypto ETFs so retail can now buy them. Not sure it will move the needle much on flows given how ‘meh’ most Europeans are to both crypto and ETFs.”
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He also noted that factors such as high fees and low public awareness in Europe compared to the U.S. could dampen demand.
International comparisons and expert expectations
The FCA’s proposal comes at a time of surging interest in crypto ETFs in the United States. For instance, BlackRock’s iShares Ethereum Trust (ETHA) has recorded 14 consecutive days of inflows, highlighting growing demand from both institutional and retail investors. This contrasts with the relatively sluggish appetite for similar products in the UK and across Europe.
Legal and financial experts say that while the FCA’s move reflects progressive thinking, it is unlikely to transform the market overnight. Diego Ballon Ossio, a partner at Clifford Chance, described the initiative as a “signal of intent,” suggesting the UK is aiming to bolster its profile as a hub for digital finance, according to CoinGape.
Outlook and success factors
Still, analysts caution that without improved financial literacy, lower fees, and more competitive products, retail interest may remain limited. While the FCA’s openness to crypto ETNs is a positive development, its impact on mass retail adoption remains uncertain.
At this stage, the UK is making a cautious but significant step toward embracing regulated crypto investment products. As global markets evolve, much attention will be on how retail investors in the UK respond.
It’s worth noting that Eric Balchunas previously predicted widespread approval of crypto ETFs by 2025.
