In a groundbreaking move for the UK cryptocurrency landscape, global crypto product issuer 21Shares has partnered with UK wealth management app Stratiphy, allowing retail investors to buy and hold crypto Exchange Traded Notes (ETNs). This development comes after the Financial Conduct Authority (FCA) lifted its four-year ban on such products, signifying a notable shift in the UK’s regulatory stance towards digital assets.
Stratiphy is set to become the first UK wealth manager to list 21Shares’ products, which include physically backed Bitcoin and Ethereum ETNs. This partnership introduces a new avenue for UK investors, who can now incorporate crypto into their investment portfolios alongside traditional assets directly through the app. Stratiphy’s innovative AI-based tools provide users with the ability to test and automate their investment strategies, aiming to enhance risk management and long-term planning for retail traders.
“Investor demand for digital assets continues to soar,” commented Daniel Gold, Stratiphy’s founder and CEO. “This partnership ensures we can offer regulated access to crypto as soon as FCA approval takes effect.”
21Shares, which manages over $11 billion in assets across 50 crypto exchange-traded products listed in Europe, is tapping into a growing market. In 2024 alone, €26 billion worth of crypto ETPs traded on European exchanges, reflecting a staggering 300% increase from the previous year. Russell Barlow, CEO of 21Shares, emphasized the significance of the FCA’s decision:
“The lifting of the ban on Bitcoin and Ethereum-backed ETNs is a great first step, allowing retail investors to get exposure to the two biggest cryptoassets in the most simple and secure way,” Barlow stated. “As regulated ETNs, we anticipate that these will be eligible for inclusion into ISA and SIPP portfolios, allowing for tax efficient exposure to cryptoassets as part of an investment portfolio.”
With 12% of UK adults currently holding cryptoassets directly through largely unregulated platforms, this partnership opens the door to a regulated pathway for retail investment in cryptocurrencies, fostering greater acceptance and access in the digital asset realm.
Impact of 21Shares and Stratiphy Partnership on Retail Investors
The recent partnership between 21Shares and Stratiphy marks a significant development in the accessibility of crypto investments for retail investors in the UK.
- Regulatory Change: The Financial Conduct Authority (FCA) has lifted a four-year ban on crypto Exchange Traded Notes (ETNs).
- Access to Crypto Assets: Retail investors can now buy and hold regulated crypto ETNs, marking a shift in the UK’s stance on digital assets.
- First Wealth Manager: Stratiphy becomes the first UK wealth manager to list 21Shares’ crypto products, including Bitcoin and Ethereum ETNs.
- Portfolio Integration: Users can add crypto exposure to existing portfolios alongside traditional assets through Stratiphy’s app.
- Automated Investment Strategies: Stratiphy’s AI-based tools enable risk management and long-term planning for retail investors.
- Growing Investor Demand: There is a significant demand for digital assets, as indicated by continued growth in crypto ETPs’ trading volume.
- Tax Efficiency: Regulated ETNs may be eligible for inclusion in ISA and SIPP portfolios, offering tax-efficient exposure to cryptoassets.
- Market Growth: 21Shares manages over $11 billion in assets and has seen a 300% increase in trading of crypto ETPs annually.
“The lifting of the ban on Bitcoin and Ethereum-backed ETNs is a great first step, allowing retail investors to get exposure to the two biggest cryptoassets in the most simple and secure way.” — Russell Barlow, CEO of 21Shares
21Shares and Stratiphy: Pioneering Regulated Crypto Access in the UK
The recent partnership between 21Shares and Stratiphy marks a significant milestone in the evolving landscape of cryptocurrency investment in the UK. With the Financial Conduct Authority (FCA) lifting its four-year ban on crypto Exchange Traded Notes (ETNs), retail investors can now securely access digital assets through regulated channels. This change not only positions 21Shares as a leader in the crypto product issuance arena but also highlights Stratiphy’s innovation in wealth management.
One of the competitive advantages of this initiative is the combination of 21Shares’ robust experience, managing over $11 billion in assets, with Stratiphy’s advanced AI tools that facilitate investment strategy automation and risk management. This dual focus on security and strategy enhances the appeal of crypto investments for retail investors who may have previously been hesitant to enter this volatile market.
However, challenges persist. The rapid growth of digital asset demand can create market volatility, which may affect investor confidence, particularly among those new to crypto. Furthermore, the need for continuous regulatory compliance places additional operational pressures on both firms, potentially diverting resources from innovation and customer service. Traditional wealth managers may also feel threatened, as they now face competition from a more agile and innovative fintech operation like Stratiphy, which could disrupt their client bases.
This development stands to benefit a wide range of retail investors, especially those looking to diversify their portfolios with crypto assets in a regulated manner. Conversely, it may create challenges for less tech-savvy investors, as they navigate the intricacies of crypto alongside traditional investments. Additionally, consumers who prefer established banking institutions may find the transition to digital asset platforms daunting.
Overall, as 21Shares and Stratiphy navigate these opportunities and challenges, their collaboration will likely set a precedent for how digital assets are incorporated into mainstream investment strategies within the UK.
