Bitcoin and Ethereum ETF Won’t See Enough Retail Demand Despite UK Lifting Ban, Says Analyst

Amid the growing demand for Bitcoin and Ethereum ETFs, UK’s top financial regulator, Financial Conduct Authority (FCA), proposed lifting the ban on crypto ETNs for retail investors. However, Bloomberg’s senior ETF analyst Eric Balchunas stated that it won’t move the “needle” much, considering the lower appetite for crypto ETFs.

Bitcoin and Ethereum ETF Could See Slow Growth in UK

In a significant development, UK’s FCA proposed to lift its ban on cryptocurrency exchange-traded funds (ETFs), enabling retail investors to access these financial products. In a June 6 statement, the financial regulator stated that the proposed change will allow retail investors to access cryptocurrency exchange-traded notes (ETNs), listed on FCA-recognized investment exchanges.

This comes within two months of BlackRock registering itself as a crypto asset firm with FCA. David Geale, executive director of payments and digital assets at the FCA said:

“We want to rebalance our approach to risk, and lifting the ban would allow people to make the choice on whether such a high-risk investment is right for them, given they could lose all their money”.

Diego Ballon Ossio, a partner at the British law firm Clifford Chance, said that this move by the FCA is a clear reflection of the country’s growing crypto ambitions.

UK Might See Subdued Demand

Demand for Bitcoin and Ethereum ETFs has been on the rise in recent months, amid the growing regulatory clarity in the US. BlackRock iShares Ethereum Trust (ETHA) has been dominating the inflows with 14 consecutive days of inflows. However, for the UK market, the demand is unlikely to pick up, according to Bloomberg strategist Eric Balchunas. In a message on the X platform, Balchunas wrote:

“UK lifting ban on crypto ETFs so retail can now buy them. Not sure it will move needle much on flows given how ‘meh’ most Europeans are to both crypto and ETFs (not to mention the higher fees vs US) but who knows.. at least they can buy them now”.

Nate Geraci, President of the ETF Store, stated that this streak of 14 consecutive days of Ether ETF inflows is the longest recorded this year, with over $800 million in fresh capital entering the market during this period.