MTTM Podcast Episode 524 – Crypto ETNs explained & financial terms rebranded

Listen to Episode 524

In this week's episode, I discuss a significant rule change that provides UK investors with a new, regulated way to access crypto assets. I explain how crypto ETNs work, the potential tax advantages and the risks you need to be aware of before investing. I also explore a thought-provoking idea: could simply changing the names of everyday financial products or concepts, such as credit cards or the state pension, improve people's understanding and therefore their finances?

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Episode 524 Podcast Summary

Crypto ETNs: UK Investors Can Now Access Bitcoin & Ethereum via an ISA

Summary

I discuss the major regulatory shift from the FCA, which, from 8th October 2025, has lifted its ban on the sale of crypto Exchange Traded Notes (ETNs) to retail investors. This change opens the door for UK investors to gain exposure to the price movements of Bitcoin and Ethereum through mainstream investment platforms, without needing to buy the assets directly from a crypto exchange. We explain what an ETN is, highlighting that it is a debt instrument and not the same as an ETF, which introduces counterparty risk - the risk that the issuer could default. I then explore the pros and cons, including the significant advantage of being able to hold crypton ETNs within a tax-free ISA.

Key insights

• A new way to invest: From 8th October 2025, UK retail investors can buy crypto ETNs that track the performance of Bitcoin and Ethereum on regulated exchanges.
• ETN vs ETF: An Exchange Traded Note (ETN) is a debt security issued by a financial institution. You do not own the underlying crypto asset, but rather a note that promises to pay you its return. This creates counterparty risk.
• Tax-efficient exposure: A key advantage is that crypto ETNs can be held within a Stocks & Shares ISA, shielding any gains from Capital Gains Tax. From the 2026/27 tax year, new investments will need to be made via an Innovative Finance ISA (IFISA).
• Mainstream access: Platforms including Interactive Investor, AJ Bell, Freetrade and Trading 212 have indicated they will offer crypto ETNs. Hargreaves Lansdown has been more hesitant, suggesting a potential date of April 2026.
• High-risk investment: The FCA has classified crypto ETNs as 'Restricted Mass Market Investments'. This means investors must pass suitability checks and confirm they will not allocate more than 10% of their net investable assets to these and other high-risk products.
• No FSCS protection for losses: While the platform you use is covered by the Financial Services Compensation Scheme, the crypto ETN investment itself is not. You are not protected if your investment loses money.

Rebranding Financial Terms: Why We Should Change Financial Language

Summary

In this section, I explore a thought piece on how the words we use in finance can shape our behaviour and perceptions, often for the worse. I explain how rebranding certain terms can empower consumers to make better decisions. For example, changing 'credit card' to 'debt card' and 'credit limit' to 'debt ceiling' immediately reframes borrowing as a liability, not a reward. Similarly, calling an 'overdraft' a 'high-interest bank loan' highlights its true cost. I also discuss why terms like 'side hustle' romanticise what is simply a 'second job'. The most significant proposal is to rename the 'state pension' to the 'state benefit', clarifying that it is not a personal pot of money but a benefit paid for by today's workers, encouraging greater self-reliance for retirement.

Key insights

• Credit Card vs Debt Card: Changing the name to 'debt card' removes the positive connotations of 'credit' and reinforces the reality that you are spending money you don't have, which could curb impulse purchases.
• Student Loan vs Graduate Tax: A 'student loan' is not a typical loan; it functions more like a 9% additional tax on earnings above a certain threshold for graduates. Renaming it would provide a clearer picture of how the system actually works.
• Side Hustle vs Second Job: The term 'side hustle' often romanticises the idea of working a second job, which is frequently unpaid in its early stages. Calling it a 'second job' presents a more realistic picture of the work required.
• State Pension vs State Benefit: The state pension is not funded by your past National Insurance contributions going into a personal pot. It is a benefit paid for by today's taxpayers. Calling it the 'state benefit' removes the sense of entitlement and highlights the reality that it is a societal dependency that could change in the future.
• Emergency Fund vs Freedom Fund: Rebranding an 'emergency fund' as a 'freedom fund' shifts the focus from negative events to empowerment. It frames the money as a tool that gives you the freedom to leave a bad job or situation, not just cover an unexpected bill.
  

Episode quiz 

1. What does ETN stand for?
a) Electronic Trading Network
b) Exchange Traded Note
c) Equity Trust Note
d) European Traded Number

2. What is the main difference between owning a share in an ETF and owning an ETN?
a) ETNs do not directly hold the underlying asset
b) ETNs cannot be held within an ISA
c) ETFs can only be bought on US stock exchanges
d) ETFs are not regulated in the UK

3. An ETN exposes an investor to counterparty risk. What does this mean?
a) The risk that the underlying crypto asset gets hacked
b) The risk that the price goes down
c) The risk that the investment platform goes bust
d) The risk that the institution issuing the ETN defaults and cannot pay the promised return

4. Initially, ETNs will provide exposure to which two cryptocurrencies?
a) Bitcoin and Ripple
b) Ethereum and Dogecoin
c) Bitcoin and Ethereum
d) Cardano and Solana

5. From the 2026/27 tax year, new investments in crypto ETNs will have to be made via which type of ISA?
a) Stocks & Shares ISA
b) Lifetime ISA
c) Junior ISA
d) Innovative Finance ISA

Answers

1. b) Exchange Traded Note
2. a) ETNs do not directly hold the underlying asset
3. d) The risk that the institution issuing the ETN defaults and cannot pay the promised return
4. c) Bitcoin and Ethereum
5. d) Innovative Finance ISA

Resources

Links referred to in the podcast:

• Sign Up To The MTTM Weekly Newsletter
• What are Crypto ETNs and how can you invest in them?
• Are premium bonds worth it?

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