Risk summary

What that warning actually means

Regulators require that wording because the sentence is literally true and because people consistently underestimate it. This page exists to explain each part of it, rather than leave you with a box you scrolled past.

You can lose all the money you invest

Cryptoassets have no floor. There is no earnings stream underneath them, no asset backing, no central bank, and no mechanism that stops a price falling to a fraction of what you paid or to effectively nothing. Individual cryptoassets have gone to zero, and there is no rule preventing any of them from doing so.

A fund or a note that tracks a cryptoasset does not change this. It changes the wrapper. If the underlying asset falls 80%, the product falls approximately 80% too, less fees. Wrapping a volatile asset in a familiar security makes it easier to buy; it does not make it behave differently.

The practical implication is the one the warning states: invest only an amount you could lose in full without it changing anything material about your life.

You should not expect to be protected

This is the part people most often misread, so it is worth being precise about what is and is not covered.

• No FSCS cover. The Financial Services Compensation Scheme does not cover cryptoassets or cryptoasset ETNs. The FCA said so explicitly when it reopened retail access: "There won't be coverage from the Financial Services Compensation Scheme."
• Limited FOS recourse. Complaints about the performance of the underlying cryptoasset generally sit outside the Financial Ombudsman Service. You may be able to complain about how a regulated firm treated you; you cannot complain that bitcoin fell.
• The asset is not regulated. The FCA regulates how these products are promoted and distributed in the UK. It does not regulate bitcoin, its price, its supply or the markets it trades in.
• MLR registration is not authorisation. A cryptoasset firm registered with the FCA for anti-money-laundering purposes has met AML requirements. That is not FCA approval of its products, and it is not a statement about the safety of your money.

Volatility

Cryptoassets have historically experienced very large price movements over short periods, including severe and prolonged drawdowns. When Hargreaves Lansdown listed crypto ETNs for its clients in September 2026, it said in its own launch statement that bitcoin's price history showed periods of "extreme losses" and that it "shouldn't be relied upon" to help clients meet financial goals. That is a distributor's assessment of a product it had just decided to sell.

Past performance is not a reliable indicator of future events. Returns may increase or decrease as a result of currency fluctuations.

A specific consequence worth naming: cryptoassets trade continuously while stock exchanges do not. A large move over a weekend is something a holder of a listed product watches and cannot act on until the market reopens, at which point the product prices in everything that happened.

Product-specific risks

Beyond the price of the underlying asset, listed products carry their own exposures.

• Issuer credit risk (ETNs). A note is a debt instrument. Physical backing and a security interest over the coins reduce this exposure; they do not convert it into fund ownership. In an insolvency you enforce a security interest through a trustee.
• Custody risk. The coins behind these products sit with institutional custodians, and the market is concentrated. Holding two products from different issuers frequently does not change your custodial exposure at all.
• Fund or product closure. Sponsors close products that do not reach scale. Hashdex's DEFI, one of the original eleven spot bitcoin funds, was liquidated in August 2026. You are paid out at net asset value — on a date you did not choose, crystallising a disposal for tax.
• Tracking failure. The creation and redemption mechanism keeps the price close to the underlying. Under severe stress, or if a venue halts, the price can detach from net asset value.
• Liquidity. Smaller products have wider bid-offer spreads, and spreads widen further in falling markets — precisely when you may want to sell.
• Staking risks. Products that stake the underlying asset take on validator operations, slashing exposure and unbonding periods. Staking payouts are set by the protocol and are not guaranteed by anyone.

Custody and self-custody

If you hold cryptoassets directly, the custody decision carries risks in both directions.

Leaving assets on a platform exposes you to that platform failing, and this industry's record on custody failures is not good. Holding them yourself removes that exposure and makes you solely responsible: a seed phrase is a bearer instrument, and if it is lost the assets are permanently unrecoverable. There is no recovery process, no support line and no exception.

Transactions on a blockchain are irreversible. An asset sent to a wrong address is generally gone.

Tax and regulation can change

Both have changed recently and in ways that mattered.

UK retail access to cryptoasset ETNs was banned from January 2021 and reopened on 8 October 2025. Crypto ETNs were eligible for a stocks and shares ISA for roughly five months before HMRC reclassified them into the Innovative Finance ISA on 6 April 2026. The restriction on crypto ETFs and crypto derivatives for UK retail investors remains in force.

Tax treatment depends on your individual circumstances and may change. Nothing on this site is tax advice.

Before you invest

If you want a personal recommendation about whether any of this is suitable for you, that has to come from a firm authorised to give advice. You can check any firm on the FCA Register. The FCA also publishes consumer guidance on cryptoassets at fca.org.uk.

If you are worried about money or debt, free and impartial help is available from MoneyHelper, which is backed by the UK government.