How to hold Bitcoin tax-free in a Stocks & Shares ISA

If you are (a) a UK citizen, (b) a stocks & shares ISA holder, and (c) curious about saving Bitcoin in a tax-efficient manner, this page is for you.

Let’s get the bad news out of the way: you can’t hold real Bitcoin in an ISA. By “real”, I’m referring to true self-custody, where you hold the keys to your coins and thus have absolute control over your funds.

As of late 2025, however, it’s possible to get exposure to Bitcoin’s price in an ISA. By this I mean you can hold an asset (specifically an exchange-traded product, or ETP) which effectively tracks the price of Bitcoin, meaning as Bitcoin’s price appreciates over the years, any gains are shielded from the taxman thanks to the ISA wrapper.

Before rushing off and buying one of these “Bitcoin proxies”, you should consider these 4 questions:

1. Which ETF?
2. Which platform?
3. What are the drawbacks vs “real” Bitcoin?
4. What does the future hold?

Disclosure: I work for a regulated investment firm, but the views expressed here are my own and do not represent those of my employer. This article is for general information and should not be taken as investment advice.

1. Which ETF?

Britain has lagged behind the US and much of Europe in terms of access to Bitcoin, the FCA having banned the sale of exchange-traded products tracking the cryptocurrency in 2021. At the time, they stated that “the FCA estimates that retail consumers will save around £53m from the ban on these products.” During the ban, the price of Bitcoin rose more than 250%.

The ban drove many retail investors towards alternative Bitcoin proxies, such as MicroStrategy (MSTR) stock, now called simply Strategy. Regardless of your opinion on Bitcoin treasury companies like Strategy, it’s patently clear that this is not an appropriate substitute. It’s a volatile and highly leveraged Bitcoin derivative, and arguably riskier than holding Bitcoin directly.

In October 2025, the FCA changed its mind and lifted the ban ”to support UK growth and competitiveness” (🙄). True to form, the rollout was delayed, messy, and beset with gotchas and added complexities. No doubt we’ll have a few Great British U-Turns before the end of the saga. More on that in the final section.

For now, these are your main options:

All of these funds are GBP-denominated (avoiding FX fees), listed on the London Stock Exchange, and - as of November 2025 - are eligible to be held in a Stocks & Shares ISA.

A common question I hear is: why ETNs? And what’s the difference between ETPs, ETFs, and ETNs?

• Exchange traded product (ETP) is a catch-all term encompassing a variety of products traded on exchanges, including funds (ETFs). In the EU and UK, UCITS rules mean that for something to be classed as an ETF it must meet a diversification criteria (i.e. it cannot be comprised of a single asset). This is why we can’t have Bitcoin ETFs.
• Exchange traded notes (ETNs) are also a type of ETP, but are technically structured as “debt securities”. This initially caused some to decry them as “paper Bitcoin” (i.e. not actually backed by anything - fractional reserve lending all over again). But as per the LSE’s admission guidelines, all the accepted ETNs are physically backed by the underlying cryptocurrency, regardless of their underlying structure.

That’s not to say there isn’t an element of risk; all ETPs come with risk. But we’ll cover some of the risks - and the significant downsides vs “real” Bitcoin - further down.

2. Which platform?

Not all ISA providers have the required permissions to offer these products. Among those that do, not all are as quick to react - or, indeed, as forward thinking - as others.

Indeed, Hargreaves Lansdown published a statement seemingly written in 2012!

“Bitcoin is not an asset class, and we do not think cryptocurrency has characteristics that mean it should be included in portfolios for growth or income and shouldn’t be relied upon to help clients meet their financial goals […] Unlike other alternative asset classes, it has no intrinsic value.”

Wow. All they had to do is throw in “b-but it’s not backed by anything!” and “it uses lots of electricity!” and we’d have had a bingo. In all seriousness, if your provider doesn’t offer Bitcoin ETPs, you can transfer to one that does - it’s a surprisingly simple process.

Choosing your ISA provider is obviously a big decision, and I’d recommend consulting this site for an impartial comparison. But when it comes to Bitcoin, here are the brokers who currently support Bitcoin ETPs:

I will continue to update this list as the situation evolves. There are no affiliate links - if you find this post useful, you can buy me a coffee with Bitcoin.

Two things to bear in mind before you do anything:

• The FCA has categorised these ETPs as Restricted Mass Market Investments, or RMMIs, meaning they’re deemed to have a higher degree of risk than “traditional investments”. In practise, this means you have to take an appropriateness assessment and sit through a 24-hour “cooling off period” before you’re allowed to buy them. This includes ticking a box to say “yes I’m ready to lose 100% of my money”. Anyone who’s recently bought Bitcoin through an exchange like Coinbase or Kraken will be familiar with this ritual.
• The Financial Services Compensation Scheme (FSCS) does not apply to crypto ETNs. It’s worth noting that the £85k FSCS protection covers broker or custodian insolvency - it’s not designed to protect against investment losses, and crypto ETNs are an investment.

In effect, the FCA has taken some of the restrictions which apply when buying cryptocurrency through a dedicated exchange and applied them to holding crypto derivatives within an ISA.

I have no problem with this in principle, but I do find our regulator’s stance on Bitcoin in 2025 to be somewhat depressing. On the one hand, we have the first global, open-source, programmable money. A currency that cannot be debased, confiscated, or altered by any government or corporation. It now has a market cap comparable to that of silver, and is underpinned by a decentralised network that has never been hacked and has had literally zero downtime in more than a decade. On the other, we have pump & dump schemes like Safemoon and countless other memecoins which can be traded with the same level of friction as Bitcoin. The FCA treats these assets as equivalent. They are not.

3. What are the drawbacks vs “real” Bitcoin?

While the price of these Bitcoin ETPs should mirror the price of Bitcoin more-or-less exactly (minus the tiny fee), you should not regard your holdings as “real” Bitcoin.

This bears repeating: holding units of an ETP does not mean you own any Bitcoin whatsoever. You own a paper claim on some Bitcoin that never leaves the custody of the fund manager. This is a far cry from what Bitcoin was intended to be.

You have exposure to the price of Bitcoin, yes, but you don’t benefit from any of Bitcoin’s core features:

• No optionality: You cannot send Bitcoin to anyone else, donate to a political cause, or use it in a multi-signature escrow transaction (side note, BlackRock has started to allow in-kind transfers).
• No sovereignty: The Bitcoin belongs to the fund manager. “Not your keys, not your coins”, as the saying goes. In contrast to holding Bitcoin directly, holding an ETP means a bank or broker could seize your assets if they wanted to.
• No anonymity: It’s not possible to hold these products without being KYC’d to the hilt. Everything’s tied to your real world identity.
• Counterparty risk: If the fund manager goes out of business, or the custodian (e.g. Coinbase) mismanages keys, you’re out of luck. As unlikely as this might be, your funds would be gone if it happened.

You might regard these as acceptable trade-offs for gaining some exposure to Bitcoin’s price within an ISA. Until now, there’s been no way to benefit from Bitcoin’s appreciating price without incurring a tax burden. But you should never regard your ETP holdings as real Bitcoin, and you should remember that nothing beats true self-custody.

If you want to learn more about Bitcoin and self-custody, there are many great books about Bitcoin which provide an excellent grounding in the subject.

4. What does the future hold?

Just when we thought things were clear, the FCA and HMRC threw us this ludicrous curve ball just days before the un-banning was due to take place.

“Initially, cETNs will be automatically eligible for inclusion in stocks and shares ISAs. From 6 April 2026, they will be reclassified as qualifying investments within the Innovative Finance ISA (IFISA).”

What.

For those unaware, the IFISA is a dead product that was launched back in 2016 to facilitate exposure to peer-to-peer loans. None of the providers listed above offer IFISAs, and many have issued statements confirming that they do not intend to.

In other words, we have a six-month window during which these products are available in mainstream savings accounts. Beyond this period, consumers have little clarity on what will happen to their funds. Some providers have indicated they will force-sell customers’ positions. Others have suggested they’ll offer to move positions to a non-ISA account.

This feels like a botched attempt by some faction within the regulator to make it harder for customers to access these products. It’s creating needless confusion among investors, and is yet further evidence of our current government’s apparent inability to execute anything cleanly.

If I had to put money on it, I’d say it’s likely there’s already a coordinated campaign among ISA providers to petition the FCA to backtrack on this absurd rule change. In fact, even HMRC’s own statement seemed to hint that they lack conviction in their decision:

“The government will keep the inclusion of cETNs in tax-advantaged accounts under review with a view to including them in the stocks and shares ISA at a later date as the market matures and as consumer understanding deepens.”

Mmm, I can smell the u-turn already. I will update this page when I hear more.

Wrapping up

I hope this guide has been useful. My website has no affiliate links, sponsors, or advertising, and is supported entirely by reader donations. Any Bitcoin sent the address below is graciously received. Obviously you’ll need to hold your coins outside of an ETP for this to work - nothing beats true self-custody!

Thanks for reading, and stay safe out there.