There is no Bitcoin ETF available for investment in the UK, so you shouldn’t consider it if you are looking to invest. In other words, UK regulators are currently refusing to approve a cryptocurrency ETF at this point – mostly as a result of the FCA’s view that crypto assets are highly speculative.
Nevertheless, you can consider a few alternatives, which this Best Bitcoin ETF UK guide discusses in more detail.
Bitcoin ETF Alternatives – Choose a Broker
Top-rated brokers provide a few reliable Bitcoin ETF alternatives in the UK.
- eToro – The Best Bitcoin Broker for Crypto Portfolios
- Capital.com – Crypto Index at 0% Commission (only available to professionals)
We’ll examine each alternative UK Bitcoin ETF option down the road – along with reviews of the brokers.
Investing in Bitcoin ETFs – A Quick Guide for 2022
Our next discussion will address the best alternative to a Bitcoin ETF in the UK using eToro’s CryptoPortfolio tool. Simply put, this is an investment portfolio managed by professionals that allows you to access a range of digital assets, including Bitcoin. eToro’s CryptoPortfolio offers a full-featured Bitcoin investment that is 100% passive, comparable to an ETF in that it will automatically rebalance and weight the portfolio.
- Step 1: Create an eToro Professional Account – You will need an eToro Account before using CopyPortfolio. The process involves providing personal information and verifying your email address and mobile number.
- Step 2: Upload your documents – You must upload a copy of your passport or driver’s license to verify your identity. Each FCA broker implements this as part of its KYC process.
- Step 3: Fund your eToro account – Your eToro account is now ready for deposits. CryptoPortfolio’s minimum investment is $1,000, even though you can add as little as $200.
- Step 4: Look up CryptoPortfolio – In the search box, enter ‘CryptoPortfolio’ and click on the result. Select ‘Invest’ to proceed.
- Step 5: Confirm your investment – The final step is to enter how much you wish to invest in the eToro CryptoPortfolio. You need to invest at least $1,000. The final step is to confirm your investment.
Alternative Markets for Bitcoin ETFs in the UK
UK residents cannot currently invest in bitcoin ETFs, as mentioned earlier in this guide. However, Bitcoin ETFs are available on European exchanges. UK investors can’t invest in them.
Top Recommended Platforms
78% of retail investor accounts lose money trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Trading forex or CFDs on margin involves a high degree of risk and may not be suitable for all investors. There is a possibility that you may suffer a loss equal to or greater than your entire investment.
CFDs are complex instruments and involve a high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
If you wish to invest in bitcoin that is safe, cost-effective, and passive, there are a few ways around this. Traditional ETFs, after all, is defined by these three characteristics.
The sections below will show you which Bitcoin ETFs we like as alternatives to the best Bitcoin ETFs UK!
eToro
Consider eToro as a viable alternative to Bitcoin ETFs in the UK. It offers a variety of markets, including commodities, cryptocurrencies, and stocks from UK and international markets. You can also find many ETFs, though none of them track bitcoin. The nearest thing to an ETF you’ll find in the UK is a CryptoPortfolio. To put it simply, eToro CryptoPortfolio is a diversified basket of assets.
This portfolio has 16 different crypto assets; Bitcoin is not the only cryptocurrency included. There is also Ethereum, Cardano, TRON, NEO, and Dash. Why does CryptoPortfolio operate like a traditional ETF?
- The eToro team professionally manages the CryptoPortfolio. Thus, you will be able to passively invest in Bitcoins and other cryptocurrencies.
- The CryptoPortfolio is rebalanced and reweighted regularly. It aligns with the overall cryptocurrency sector’s performance. Currently, eToro gives Bitcoin a weightage of 17.31% and Cardano a weightage of 16.77%. Litecoin, Swap, and Ethereum, on the other hand, contribute less than 3% each.
- The eToro CryptoPortfolio is incredibly affordable, comparable to ETFs. With this feature, you won’t need to worry about ongoing charges – so you can invest for a long time.
To gain eToro CryptoPortfolio access, you must invest at least $1,000. Alternative investment options exist. eToro Copy Trading allows you to match your investment strategy with a successful Bitcoin investor. Here, the minimum is only $500. You can invest directly in Bitcoin, paying 0.75% (via the spread) – but you will also be required to invest just $25 per trade.
eToro will manage the storage of your Bitcoin tokens for you, so you don’t have to worry about that. It means that eToro stores your Bitcoin investment until it is time to cash out. Setting up an eToro account is quick and easy. Additionally, the broker offers support for debit/credit cards, eWallets, and UK bank transfers. The FCA authorizes and licenses eToro, so you can be confident that you’re dealing with a reliable broker that adheres to all UK rules.
Pros
- Access to professional accounts.
- Allow for spread-only cryptocurrency trading.
- No commission on stocks in the UK and internationally.
- $25 minimum trade investment.
- Accepts debit/credit cards, e-wallets, and local bank transfers.
- Regulation: FCA, ASIC, and CySEC.
- More than 20 million users.
- Trading tools such as social trading and copy trading are available.
Cons
- It may not meet technical traders’ needs.
- MT4/MT5 not supported
Capital.com
You might also consider Capital.com when searching for alternative Bitcoin ETFs in the UK. The popular trading platform offers market spreads and leveraged CFDs. Concerning Bitcoin, this top-rated broker offers Crypto Index markets. Simply put, this measures the prices of five key digital currencies. It includes Bitcoin, Ethereum, XRP, Bitcoin Cash, and Litecoin. At Capital.com, the Crypto Index is weighted based on each respective digital asset’s performance and its market capitalization.
In contrast, Bitcoin has the largest weighting on the index, whereas Litecoin has the smallest. To be clear upfront, the Capital.com Crypto Index is available only to UK residents who are classified as professional clients. According to the FCA’s ruling in January 2021, retail investors cannot access cryptocurrency derivatives. However, professional clients can trade the Crypto Index with zero commission and tight spreads.
Due to its use as a CFD instrument, the Crypto Index provides opportunities to profit from rising and falling markets. You can, for example, place a sell order on the Crypto Index if the wider digital asset outlook is bearish. Capital.com also offers leverage up to 1:10 for professional clients trading the Crypto Index. In this way, your positions could be magnified by a factor of 20. CFDs come with the added benefit of not requiring the trading of underlying assets.
This eliminates the need to string tokens – which is a security risk. Capital.com also offers thousands of alternative markets along with over 200 crypto pairs. The list includes stocks, ETFs, metals, energies, and forex. Register for an account with Capital.com and upload some documentation to get started. Regulatory agencies such as the FCA heavily regulate this broker. This makes Capital.com a safe platform to trade Bitcoin and other assets.
Pros
- Leading spread betting and CFD brokers.
- FCA-regulated.
- Deposit as low as £20 (debit/credit cards and e-wallets).
- 100% commission-free.
- Low spreads and no transaction fees.
- Supports thousands of different financial markets.
Cons
- The native web platform might not be suitable for advanced traders.
- Deposit of at least £250 via bank transfer.
What is a Bitcoin ETF?
ETFs typically comprise stocks and bonds and are regarded as diversified investments. If you find an ETF that gives you access to all 100 companies listed on the UK’s primary stock index, for instance, that’s the FTSE 100. However, you can also find UK ETFs that support a specific asset – including gold or silver.
Retail traders can invest indirectly without having to manage storage or logistics. Passive investment is possible because the provider manages the ETF.
But how does the Bitcoin ETF work? The ETF provider will purchase a considerable amount of Bitcoin, which it will then store and insure. As ETFs are generally listed on public exchanges, you can purchase shares through those exchanges. Your Bitcoin ETF investment will grow in value if and when the bitcoin price rises.
Unlike traditional ETFs, you won’t earn dividends or interest when investing in Bitcoin. Contrary to popular belief, the only way to make money from an ETF is when its NAV (Net Asset Value) goes up – something that typically occurs; if the Bitcoin itself goes up as well.
Does the UK have a Bitcoin ETF?
Throughout this guide, we have noted that residents of the UK cannot purchase Bitcoin ETFs. The FCA is still debating whether to approve a crypto-centric ETF. Similarly, the SEC has denied all applications for Bitcoin ETFs in the US.
Many Bitcoin ETFs are available in other markets besides the UK. In Canada, you’ll find the most ETFs of this type, with no less than seven markets offered. Additionally, Bitcoin ETFs are available on the European market. Unfortunately, the UK is not eligible to purchase these products. Only a professional-client is exempt from this rule.
Best Bitcoin ETFs UK: What are the benefits?
It is not yet clear when Bitcoin ETFs will come to the UK financial sector, but the prospects are promising once a market is established.
Some of the benefits include:
Low Fees
In the investment arena, ETFs offer some of the best pricing. Maintenance fees on most ETFs are less than 0.25 percent per year. Furthermore, investing in ETFs through a broker like eToro does not require you to pay a commission for trading.
Because of this, by investing in the best Bitcoin ETFs United Kingdom, you will be able to invest in digital currencies at an incredibly low cost.
Safety
Investing in a Bitcoin ETF means your digital tokens are safe. To withdraw tokens purchased from an online exchange to a private wallet, you would first buy cryptocurrencies like Bitcoin from an online exchange. Therefore, you are responsible for keeping your private keys secure – a very challenging task for beginners.
If, however, the best Bitcoin ETFs UK do reach British shores, their security rests with the provider. Eventually, the FCA will require UK Bitcoin ETFs to insure their digital tokens, as it does with other precious metal assets such as gold and silver. This will give Bitcoin investors another layer of security.
Ease of entry and exit
Many people will find the investment process of Bitcoin a lot easier with ETFs – especially novices. As traditional shares, ETFs trade on stock exchanges. During regular market hours, you can invest in a Bitcoin ETF. Your preferred broker can help you sell the Bitcoin ETF and cash out your profits when you are ready.
Bitcoin ETFs: How to Invest? A Step-by-Step Guide
You may end up disappointed if you choose to invest in Bitcoin ETFs right now. As of yet, no Bitcoin ETFs have been approved by the FCA in the domestic market. There is, however, an excellent alternative to Bitcoin ETFs available at eToro – the CryptoPortfolio. It offers you the opportunity to invest in Bitcoin and other digital tokens in a low-cost and passive manner.
Here’s a walkthrough of the investment process in under five minutes if you think it may be helpful for your long-term financial goals.
Step 1: Create a crypto broker account
You can get started by visiting the eToro website and clicking ‘Join Now.” Enter your contact information and personal information by following the on-screen instructions.
Create an eToro account by selecting a username and password. Afterward, verify your mobile number.
Step 2: Upload your KYC documents
eToro requires a KYC (Know Your Customer) process before trading. A copy of your driver’s license or passport is required to complete this process. You will provide a copy of a recent bank statement or utility bill to verify your address. Unlike other UK brokerage sites, you can quickly verify your KYC documents with eToro.
Step 3: Add funds to your eToro trading account
To access the Bitcoin marketplace, you need to deposit some money. eToro requires a minimum deposit of $200 (about £145) for new users. However, the minimum investment for the CryptoPortfolio is $1,000.
You can make deposits using any debit or credit card, PayPal, Skrill, or Neteller to deposit funds – all of these methods are instant. Also, you can transfer the funds via UK bank transfer if you are willing to wait 1-3 working days.
Step 4: Search for CryptoPortfolio
Use the search box on the top of this page to go directly to an investment page for CryptoPortfolio. To access CryptoPortfolio, type it into your search bar and click on the result.
Explore the CryptoPortfolio tool’s fundamentals on the next page. It is possible to view the weighted currency basket and the cryptocurrency held in it currently.
Step 5: Make a CryptoPortfolio investment.
Click on the ‘Invest’ button to invest in the eToro CryptoPortfolio. You will then see a box displaying your investment order.
Investing in CryptoPortfolio requires a minimum investment of $1,000. To proceed, click on the ‘Invest’ button. In your eToro portfolio, you can always exit your investment.
Conclusion: Best Bitcoin ETFs in the UK
To summarize, the best Bitcoin ETFs have yet to appear in the UK. It is largely due to the FCA still considering highly volatile and speculative cryptocurrencies. In many ways, the FCA is right. Alternatively, suppose you desire access to the digital currency arena and are willing to take on a higher degree of risk. In that case, the closest alternative to a Bitcoin ETF is given via an eToro CopyPortfolio.
The ETF is managed by professionals and rebalanced and reweighted frequently, just like a traditional ETF. Furthermore, eToro is extremely successful with its CryptoPortfolio – with 201% returns in 2020 and 291% in 2021!
FAQ
Does the UK have a Bitcoin ETF?
Currently, the UK does not have any Bitcoin ETFs. The only Bitcoin ETFs offered are located in Canada and Europe.
What is the expected date of the UK’s first Bitcoin ETF?
In the UK, several providers are planning to launch Bitcoin ETFs. So far, no approval from the Financial Conduct Authority.
What are some alternatives to the best Bitcoin ETFs UK?
Consider eToro CryptoPortfolio if you consider investing in a UK Bitcoin ETF because it is low-cost, regulated, and passive. It is like an ETF; you can invest in a large basket of digital tokens all at once. Moreover, the CryptoPortfolio is professionally managed by the eToro team, which means passive investing is available to you.
