Best Bitcoin ETF UK – Top Bitcoin ETFs in the UK
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If you’re based in the UK and looking to invest in a Bitcoin ETF – you should know that no such instrument exists in the domestic marketplace. That is to say – and much like the US, UK regulators are yet to consider a Bitcoin-related ETF at this moment in time – largely because the FCA still views crypto assets as highly speculative.
With that said, there are a number of alternatives to consider – which this Best Bitcoin ETF UK guide will explore in greater detail.
Table of Contents
#1 Bitcoin Broker in the UK – eToro
Alternatives to the Best Bitcoin ETF UK – Choose a Broker
We found a small selection of top-rated brokers that offer notable alternatives to the best Bitcoin ETFs in the UK.
- eToro – Overall Best Bitcoin Broker – Invest in CryptoPortfolios
- Capital.com – 0% Commission Crypto Index (Professional Clients Only)
We will discuss each UK Bitcoin ETF alternative further down in this guide – alongside reviews of the above brokers.
How to Invest in the Best Bitcoin ETF UK – A Quick Guide For 2022
As we discuss in more detail shortly, the best alternative to a Bitcoin ETF in the UK comes in the shape of the CryptoPortfolio tool offered by eToro. In a nutshell, this is a professionally managed portfolio that gives you access to a basket of cryptocurrencies – including Bitcoin. The CryptoPortfolio offers a 100% passive way to invest in Bitcoin – much like an ETF, as eToro will automatically rebalance and weight the basket.
- Step 1: Open a Professional Account with eToro – To get started with an eToro CopyPortfolio, you will need to open an account. You can do this by providing some personal information and confirming your email address and mobile number.
- Step 2: Upload Documents – You need to verify your identity by uploading a copy of your passport or driver’s license. This is part of the KYC process that is implemented by all FCA brokers.
- Step 3: Deposit Funds – You can now make a deposit into your eToro account. Although you can add from just $200, the minimum CryptoPortfolio investment is $1,000.
- Step 4: Search for CryptoPortfolio – Enter ‘ CryptoPortfolio’ into the search box and click on the result that pops up. Then, click on the ‘Invest’ button.
- Step 5: Confirm Investment – Finally, enter the amount of money you would like to invest in the eToro CryptoPortfolio. As stated above, the minimum is $1,000. To confirm your investment, click on the ‘Invest’ button.
Cryptoassets are highly volatile unregulated investment products. No EU investor protection. 67% of retail investor accounts lose money when trading CFDs with this provider.
Best Bitcoin ETF UK – Alternative Markets to Consider
As mentioned earlier in this guide, there are currently no Bitcoin ETFs available to UK residents. Sure, there are several Bitcoin ETFs listed on European exchanges. But, these are not available to invest in from the UK.
The good news is that there are a couple of ways around this – should you wish to invest in Bitcoin in a safe, low-cost, and most importantly – passive nature. After all, these are the three main characteristics of traditional ETFs.
To check out which alternatives to the best Bitcoin ETFs UK we like – be sure to read the sections below!
1. eToro – Overall Best Bitcoin Broker – Invest in CryptoPortfolios
If you’re looking for an alternative to Bitcoin ETFs in the UK – look no further than eToro. This online broker offering heaps of markets – which includes everything from the UK and international stocks and forex to commodities and cryptocurrencies. You will also find a wide selection of ETFs, albeit, none of which track Bitcoin. You can, however, invest in something called a CryptoPortfolio – which is as close to a Bitcoin ETF as you will find in the UK. In its most basic form, the eToro CryptoPortfolio is best described as a diversified basket of assets.
For example, at the time of writing, this consists of 16 different crypto assets. In addition to Bitcoin, this includes the likes of Ethereum, Cardano, TRON, NEO, and Dash. The reason that the CryptoPortfolio operates like a traditional ETF is three-fold. First, the CryptoPortfolio is professionally managed by the eToro team. As a result, you will be investing in Bitcoin and other cryptocurrencies in a completely passive way. Second, the CryptoPortfolio is regularly rebalanced and reweighted.
This ensures that the portfolio aligns with the performance of the wider cryptocurrency industry. For instance, eToro is currently giving Bitcoin and Cardano a weightage of 17.31% and 16.77% respectively. At the other end of the scale – tokens like Litecoin, Uniswap, and Ethereum each contribute less than 3%. Third, and much like conventional ETFs, the eToro CryptoPortfolio is super cost-effective. In fact, you won’t pay any additional fees to use this feature – so you can invest for as long as you want without needing to worry about ongoing charges.
We should note that the minimum investment required to access the eToro CryptoPortfolio is $1,000 – or about £725. If this is too steep for you – other options exist. For example, the eToro Copy Trading tool allows you to mirror a successful Bitcoin investor like-for-like. The minimum here is lower at just $500. Or, you might even consider investing in Bitcoin directly. In doing so, not only will you pay an industry-leading fee of 0.75% (via the spread) – but the minimum investment is just $25 per trade.
Plus, you won’t need to worry about storing your Bitcoin tokens yourself in a private wallet – as this role is reserved for eToro. That is to say, eToro will safely store your Bitcoin investment until you are ready to cash out. In terms of getting started, eToro accounts take just minutes to set up. The broker supports debit/credit cards, e-wallets, and UK bank transfers for added convenience. And most importantly – eToro is authorized and licensed by the FCA – so you can be sure you are using a quality broker that complies with all UK regulations.
Pros
- Professional client accounts
- Invest in cryptocurrencies on a spread-only basis
- Buy thousands of UK and international stocks at 0% commission
- Minimum investment per trade from just $25
- Supports debit/credit cards, e-wallets, and local bank transfers
- Regulated by the FCA, CySEC, and ASIC
- Used by over 20 million people
- Social and copy trading tools
Cons
- Perhaps too basic for technical traders
- No support for MT4 or MT5
Cryptoassets are highly volatile unregulated investment products. No EU investor protection. 67% of retail investor accounts lose money when trading CFDs with this provider.
2. Capital.com – 0% Commission Crypto Index (Professional Clients Only)
For example, while Bitcoin dominates the index with the largest weightage, Litecoin carries the least. Before we go any further, we should make it clear that the Capital.com Crypto Index is only available to UK residents that are classed as professional clients. This is because retail investors can no longer access cryptocurrency derivatives, as per the FCA’s ruling in January 2021. Nevertheless, if you are a professional client – you can trade the Crypto Index at 0% commission alongside tight spreads.
Furthermore, as the Crypto Index is offered as a CFD instrument, this allows you to profit from both rising and falling markets. For instance, if the wider digital asset arena is looking bearish, you might consider placing a sell order on the Crypto Index. Capital.com also allows professional clients to trade the Crypto Index with leverage of up to 1:20. As such, this potentially allows you to magnify your positions by a factor of 20 times. An additional benefit of trading the Crypto Index via a CFD is that the underlying assets do not exist.
In turn, this means that you do not need to worry about string your tokens – which in itself is a security risk. Capital.com also offers over 200+ individual crypto pairs – alongside thousand of alternative markets. This includes stocks, ETFs, hard metals, energies, forex, and more. You can get started with a Capital.com account by registering and uploading some documentation. The broker is heavily regulated – which includes a license from the FCA. As such, Capital.com offers a secure platform to trade Bitcoin and other assets.
Pros
- Top-rated spread betting and CFD broker
- Regulated by the FCA
- Minimum deposit just £20 (debit/credit cards and e-wallets)
- 0% commission on all markets
- Tight spread and no deposit/withdrawal fees
- Thousands of financial markets supported
Cons
- Advanced traders might find the native web platform too basic
- Minimum deposit of £250 on bank transfers
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.25% of retail investor accounts lose money when trading spread bets and/or CFDs with this provider.
What is a Bitcoin ETF?
An exchange-traded fund (ETF) is typically synonymous with diversified investments that consist of stocks and bonds. For example, you might come across a FTSE 100 ETF – which allows you to invest in all 100 companies listed on the UK’s primary stock index. With that said, it is also possible to find ETFs in the UK that track just a single asset – like gold or silver.
This allows retail traders to indirectly invest in the respective asset without needing to worry about storage or logistics. This is because the provider behind the ETF takes care of the asset itself – meaning that you can invest in a passive nature.
So – how does a Bitcoin ETF work? Well, the main premise is that the ETF provider will purchase a large quantity of Bitcoin – which it will subsequently store and insure. You can then invest purchasing shares – as ETFs are usually listed on public stock exchanges. If and when the price of Bitcoin rises, so should the value of your Bitcoin ETF investment.
Unlike traditional ETFs, you will not earn any interest payments or dividends when gaining exposure to Bitcoin. On the contrary, the only way that you will make money is if the NAV (Net Asset Value) of the ETF rises – which will typically only happen if the price of Bitcoin itself also increases.
Is There a Bitcoin ETF UK?
As we have noted several times throughout this guide, there is no Bitcoin ETF available to UK residents. This is because the FCA is yet to approve a crypto-centric ETF in the domestic market. This is also the case with Bitcoin ETF applications in the US – all of which have been denied by the SEC.
Outside of the UK, a number of Bitcoin ETFs do exist in other marketplaces. Perhaps the most recognized ETFs of this nature can be found in Canada – with no less than 7 markets available. There are also a number of Bitcoin ETFs in the European marketplace. Either way, these financial products are not available to UK investors. The only exception to this rule is if you are classed as a professional client.
Benefits of the Best Bitcoin ETFs UK?
Although it remains to be seen when Bitcoin ETFs will arrive in the UK financial arena, there are lots to look forward to when a marketplace is eventually created.
This includes:
Low Fees
ETFs are one the most competitively-priced financial instruments in the investment space. In fact, most ETFs will cost you less than 0.25% per year in annual maintenance fees. Plus, when you invest in ETFs with a broker like eToro – you are not required to pay any trading commissions.
As such, when the best Bitcoin ETFs UK do arrive in the domestic market, this will allow you to invest in digital currencies in a super low-cost manner.
Safety
When you invest in a Bitcoin ETF, you do not need to worry about the safety of your digital tokens. Ordinarily, when you buy cryptocurrencies like Bitcoin from an online exchange, you then need to withdraw the tokens to a private wallet. It is therefore your responsibility to keep your private keys safe from hackers – which is no easy feat for beginners.
On the other hand, when the best Bitcoin ETFs UK do arrive on domestic shores, the security of your tokens is the sole responsibility of the provider. It is all-but-certain that – like other hard assets such as gold and silver, that the FCA will require Bitcoin ETFs in the UK to insure their digital tokens. This will add yet another safety net to your Bitcoin investment.
Easy Entry and Exit
ETFs will also make the Bitcoin investment process a lot easier – especially for beginners. This is because ETFs trade on public stock exchanges in the same way as traditional shares. This means that at any time during standard market hours, you will be able to invest in the respective Bitcoin ETF. Then, when it comes to cashing out your profits, you simply need to sell the Bitcoin ETF at your chosen broker.
How to Invest in the Best Bitcoin ETF UK? Detailed Walkthrough
If you’re keen to invest in the best Bitcoin ETFs UK right now – you will be disappointed. After all, the FCA is yet to approve any Bitcoin ETFs in the domestic market. You can, however, invest in a great alternative to Bitcoin ETFs at eToro – in the form of a CryptoPortoflio. As we mentioned earlier, this allows you to invest in Bitcoin and other digital tokens in a passive, low-cost, and most importantly – passive nature.
If this sounds like something that would be useful for your long-term financial goals – follow the step-by-step process below to complete the investment process in under five minutes.
Step 1: Open a Crypto Broker Account
To get the process underway, visit the eToro website and look for the ‘Join Now’ button. Follow the on-screen prompts by entering your personal information and contact details.
You also need to choose a username and password for your newly created eToro account. Finally, confirm your mobile number to complete the registration process.
Cryptoassets are highly volatile unregulated investment products. 67% of retail investor accounts lose money when trading CFDs with this provider.
Step 2: Upload KYC Documents
You will need to quickly go through a KYC (Know Your Customer) process before you can place any trades at eToro. This will require a copy of your passport or driver’s license. To prove your address, you’ll need to upload a copy of a recently issued bank account statement or utility bill. Unlike other well-known brokerage sites in the UK – eToro will verify your KYC documents almost immediately.
Step 3: Deposit Trading Funds
Next, you will need to deposit some money so that you can access the Bitcoin marketplace. The minimum deposit requirement for first-time users at eToro is $200 (about £145). However, if you are planning to invest in the CryptoPortfolio – the minimum is $1,000.
You can deposit funds with a debit or credit card, Paypal, Skrill, or Neteller – all of which are processed instantly. If you are happy to wait 1-3 working days for the funds to arrive, you can also perform a UK bank transfer.
Step 4: Find CryptoPortfolio
To go straight to the relevant CryptoPortfolio investment page – use the search box at the top of the page. All you need to do is type ‘CryptoPortfolio’ and then click the result that loads.
On the next page, you might want to spend some time exploring the fundamentals of the CryptoPortfolio tool. For example, you can see which cryptocurrencies are currently held in the basket and at what weightage. You can also view the performance of the CryptoPortfolio since it was launched by eToro.
Step 5: Invest in CryptoPortfolio
If you are happy to proceed with an investment in the eToro CryptoPortfolio – click on the ‘Invest’ button. You will then see an investment order box appear on the screen like in the image below.
Best Bitcoin ETF UK – Conclusion
In summary, the best Bitcoin ETFs are yet to arrive in the UK marketplace. This is largely because the FCA still views cryptocurrencies as highly speculative and volatile asset classes. In many ways, the FCA is not wrong. However, if you do have a slightly higher appetite for risk and wish to gain access to the digital currency arena – the best alternative to a Bitcoin ETF in the UK is offered via the eToro CopyPortfolio.
This is a professionally managed basket of cryptocurrencies that are regularly rebalanced and reweighted – just like a traditional ETF. Plus, the CryptoPortfolio has performed very well since it was launched – with eToro generating returns of 201% in 2020 and 291% in the first nine months of 2021!
eToro – Best Alternative to Bitcoin ETFs UK
FAQ
Is there a Bitcoin ETF UK?
When will Bitcoin ETFs come to the UK?
Is there an alternative to the best Bitcoin ETFs UK?
