No, cryptocurrency is not regulated like traditional investments in the UK. While crypto exchanges must register with the FCA for anti-money laundering purposes, crypto assets themselves are unregulated. This means you have no Financial Services Compensation Scheme (FSCS) protection if things go wrong, and no recourse to the Financial Ombudsman Service.

The FCA has repeatedly warned that investors should be prepared to lose all their money when investing in crypto assets.

No, you cannot hold cryptocurrency directly in a UK ISA or most pensions. HMRC doesn't consider crypto assets as qualifying investments for ISAs. However, you can gain indirect crypto exposure through certain exchange-traded products (ETPs) or blockchain-focused funds within these tax wrappers.

Some SIPPs allow crypto-related investments, but direct cryptocurrency holdings remain prohibited across UK tax-advantaged accounts.

If you lose your private keys or forget your wallet password, your cryptocurrency is gone forever. There's no password reset, no customer service to call, and no way to recover funds. An estimated 20% of all Bitcoin (worth billions) is permanently lost due to forgotten passwords or lost keys.

This is why secure backup methods and using reputable exchanges with recovery options is crucial for most UK investors.

Yes, early Bitcoin investors who held have seen extraordinary returns — but timing has been everything. Those who bought Bitcoin at its 2021 peak of £48,000 are still down significantly. Studies show that 90% of crypto traders lose money, and most altcoins from 2017's boom have lost 95%+ of their value.

While some have indeed built wealth through crypto, survivorship bias means we hear success stories more than the countless losses.

Cryptocurrency is exponentially riskier than traditional investments. Bitcoin can move 10-20% in a single day — what the FTSE 100 might move in a year. Crypto faces risks that don't exist in traditional markets: exchange hacks, regulatory bans, lost passwords, and 24/7 trading volatility.

While stocks represent ownership in real companies with assets and revenues, most cryptocurrencies have no underlying value beyond speculation. Financial advisors typically recommend crypto should be no more than 5% of a portfolio — if any at all.