UK investors back crypto more as regulatory changes loom, but knowledge gaps persist

Investors in the United Kingdom are increasingly adding cryptocurrencies to their portfolios, but a sizable knowledge gap remains, according to WisdomTree data compiled from last year’s survey responses and updated for 2025. While 12% of investors held crypto in their portfolios last year, the current level is believed to be higher as awareness grows. Still, the same data show a substantial portion of investors are not comfortable with the asset class. Some 72% say they are not knowledgeable about cryptocurrencies, and 31% say they wouldn’t know what action to take in the event of a sharp price fall.

With the Financial Conduct Authority regulating crypto platforms and preparations under way to lift its ban on crypto exchange-traded products, or ETPs, from Oct. 8, more investors could decide to allocate money to digital assets. Among those who already hold crypto, a quarter said they use it as part of their retirement strategy, and a fifth have invested to help with a home purchase. Additionally, 40% said they would be more likely to invest in crypto if their investment platform or adviser offered access to it. A fifth indicated they would be more inclined to invest if local market rules changed.

Under current rules, access to digital assets is typically gained through crypto-specific platforms rather than traditional stock exchanges. Adria Beso, head of European distribution at WisdomTree, said: "Now that the FCA has permitted retail access to UK-listed crypto ETPs, we expect this to become the preferred vehicle for investors. Institutions will play a crucial role in guiding adoption, whether through advisers, platforms, or direct allocations." The note underscores a broader shift as crypto tokens have boomed over the past year, fueled by institutional interest and a wave of new crypto-holding firms. The shift has positioned crypto as a potential long-term saving and investing vehicle rather than purely a vehicle for speculation.

Dovile Silenskytė, director of digital assets research at WisdomTree, stressed the asset’s volatility: "Bitcoin is a very volatile asset. Over the past 11 years, it was the best performing asset during eight of those years, and the worst-performing asset during three of those years. And it hasn't found itself anywhere in the middle." The research suggests that one in four investors would allocate more than 10% of their portfolio to crypto, a level well above what many experts consider prudent. WisdomTree nonetheless notes that crypto exposure of just 1% in a diversified portfolio could help improve returns with limited impact on overall risk.

Education, Silenskytė argued, is essential to helping investors use crypto sensibly and manage the ups and downs. Simple approaches such as investing regularly and building balanced portfolios can make a meaningful difference over time. The firm highlights that many investors may not understand how crypto fits within a broader risk framework, and too-large allocations could undermine long-term goals.

In the evolving landscape, a handful of DIY investing platforms are shaping access to crypto products. Names commonly cited include AJ Bell, Hargreaves Lansdown, interactive investor, InvestEngine, and Trading 212, which illustrate the growing appetite for regulated, accessible routes to crypto exposure. These platforms often emphasize granular access to crypto-related products while still operating within broader financial services ecosystems.

The regulatory timeline and platform dynamics come as more financial institutions explore crypto holdings and as players in the market seek to balance risk with the potential for long-term returns. Analysts say the integration of crypto into retirement portfolios or other long-term goals will depend on continued education, risk monitoring, and thoughtful allocation strategies. The pace of adoption could accelerate if listed crypto ETPs provide a familiar, regulated interface for retail and institutional investors alike.

As markets continue to digest the evolving regulatory framework, investors should weigh the potential benefits of added diversification against the risks inherent in price volatility and regulatory change. WisdomTree’s research emphasizes that education and disciplined allocation are key to avoiding excessive risk while seeking to participate in potential long-term growth.