If the question is can you include bitcoin in your ISA or SIPP, the short answer is “no”. The five-second answer is “sort of, but are you sure you want to?” And the two-minute answer is below:
It is not possible to hold Bitcoin directly in an ISA, for starters, and while there are exchange-traded products (ETPs) linked to Bitcoin, the UK financial regulator has banned the sale of ETP linked to bitcoin to retail investors.
However, Bitcoin miner Argo Blockchainis one way investors can get some sort of exposure within their ISA or SIPP.
In fact, Argo has been one of the most popular shares traded across UK investment platforms so far this year.
“Obviously any exposure to cryptocurrency comes with high risks attached, due to the extreme volatility of the underlying asset,” says Laith Khalaf, financial analyst at AJ Bell.
“Only experienced investors with large and well diversified portfolios should even consider gaining exposure, and even then it should be with a small amount of money they are willing to lose.”
Myron Jobson, personal finance campaigner at Interactive Investor, says: “You can’t invest in Bitcoin or any cryptocurrencies directly through mainstream DIY investment platforms”.
However, he says the spike in popularity of Argo Blockchain, which can be held in an ISA or SIPP, is indicative of a broader interest in crypto.
“For many mainstream investors, investment in the company is a speculative, high-risk play on cryptocurrency growth story, without having direct holding in cryptoassets.
“Bitcoin is notoriously volatile and for many investors, the price swings have been simply too wild to stomach,” Jobson says.
He also makes the point that, unlike conventional stocks and shares investments where there are some metrics like price-to-earnings ratio to help investors value stocks, for investors used to choosing shares or funds, valuing bitcoin is very different.
“Things like the cost of transaction and mining the Bitcoin can give you an idea of what they're worth, but this sort of information is not always easy to find,” Jobson says, with the sheer newness of bitcoin and other cryptocurrencies means they have not built up enough of a track record for any meaningful conclusions on trends and behaviour to be drawn.
“Whether Bitcoin will continue to outperform remains to be seen. However, investment into the cryptocurrency from players from the mainstream investment industry could serves to give further legitimacy to Bitcoin but the jury is still very much out.
“It is difficult for the everyday investor to ignore the meteoric rise of Bitcoin at a time when the traditional assets are having to work harder to produce good returns. But we have seen all this before, and it’s come crashing down to earth in the past. Whether history will repeat itself remains to be seen, but there is a sense from some of ‘this time it’ll be different’, stoked by the participation of mainstream investment firms.”
It's quite simple, says Sarah Coles, personal finance analyst at Hargreaves Lansdown, “you cannot put money in bitcoin in your ISA and SIPP because, quite rightly, bitcoin derivatives have been banned by the FCA so they’re no longer saleable”.
“Putting money into bitcoin is speculating on a currency with no intrinsic value, whereas SIPPS and ISAs are about long term investment.
“Bitcoin should attract beer money not pension money.”
FAQs
No, you can't hold crypto in an ISA. However, there are a few ways you can get exposure to crypto-related companies through a stocks and shares ISA. Here are some possible ideas: Buy shares in a crypto-mining company such as Argo Blockchain.
Can I put Bitcoin in my SIPP? ›
Whilst I can't bring myself to buy bitcoin at current levels I am considering getting some exposure via my SIPP. Bitcoin is not eligible for SIPP investment but with several companies holding substantial holdings in bitcoin now it is possible to get some exposure and invest in a solid company at the same time.
Can you have both ISA and SIPP? ›
It's entirely possible to have a SIPP and an ISA simultaneously. Still, it is best to do your research before making a decision. Many people choose a dual, diversified approach to retirement and general savings to benefit from the advantages of each account.
Should investors include Bitcoin in their portfolios? ›
Using a CVaR model, Eisl (2015) and Kajtazi and Moro (2019) suggest that adding Bitcoin significantly improves the portfolio performance. Guesmi et al. (2019) show that Bitcoin can provide diversification and hedging benefits for investors.
What investments Cannot be held in an ISA? ›
As mentioned above, funds and ETFs that do not have 'UK reporting status' also cannot be included in ISAs. Therefore, investors should ensure that funds are "UK friendly" before making a purchase. It's also worth noting that subscription shares can be held in ISAs but warrants cannot.
What money can you put in an ISA? ›
You can currently save up to £20,000 into an ISA each tax year (6 April to 5 April). This is called your annual ISA allowance. Lifetime ISAs work a little differently. With these, you can only save up to £4,000 each tax year, with the government adding a 25% bonus.
Can I take my money out of a SIPP? ›
Unless you're aged 55 and ready to choose a retirement option, you cannot withdraw from your SIPP. Take a look at your available retirement options to see how best to take money from your pension when you're ready.
What are the rules for a SIPP? ›
Anyone under the age of 75 can pay into a SIPP. Even if you're not earning, you can contribute up to £2,880 net each tax year and receive tax relief. And if you're a parent, you can open a Junior SIPP for each child – just remember that they won't be able to access it until they reach at least age 55 (57 from 2028).
What assets can a SIPP hold? ›
SIPPs give you control over how your pension savings are invested and your savings generally grow free of UK income and capital gains tax. With a SIPP you can invest in assets including: unit trusts, shares, cash or open-ended investment companies.
Can I put $20,000 in an ISA every year? ›
Putting money into an ISA
Every tax year you can save up to £20,000 in one account or split the allowance across multiple accounts. The tax year runs from 6 April to 5 April. You can only pay into one Lifetime ISA in a tax year. The maximum you can pay in is £4,000.
You may have to pay a significant amount of tax if you make large withdrawals in a short period of time. If you take too much out of your pension this may erode the capital in your SIPP. If investment returns are poor and a high level of income is taken, this will result in your SIPP falling in value.
What are the new ISA rules for 2024? ›
Higher minimum age for cash ISAs
The higher minimum age from 16 to 18 for cash ISAs is a transitional change. This means that ISA providers have from 6 April 2024 until 6 April 2026 to comply with the new rules. We've made these changes now, so from 6 April 2024 you'll need to be 18 or over to apply for our Direct ISA.
What do financial advisors think of Bitcoin? ›
While no one knows what returns will be in the future, I believe the majority of Bitcoin's returns lie ahead. That's because Bitcoin is not a tech stock. It's an entirely new asset class. It competes as a store of value with gold, bonds, stocks, and real estate, but it is still tiny compared to those asset classes.
Should I add Bitcoin to my portfolio? ›
Most financial experts recommend limiting crypto exposure to less than 5% of your total portfolio. Crypto is considered a high-risk asset class. Limiting allocation helps manage overall volatility and risk. Those new to crypto investing may start with 1% to 2% as an introduction.
What is the biggest risk with investing in Bitcoin? ›
Several potential drawbacks of Bitcoin include include:
Bitcoin comes with high transaction costs, and the transactions can take several minutes to complete. A large amount of Bitcoin and Ethereum mining is based in China and the Chinese government has shut mining and transactions down.
Can you hold foreign currency in an ISA? ›
Please note: HMRC rules don't allow you to hold foreign currency in an ISA, but you can still buy international shares. The currency conversion happens when you buy and sell, and any income from non-UK holdings is converted to sterling automatically.
Can you have funds in an ISA? ›
Investment ISAs
Also known as a stocks and shares ISA, an account that allows you to hold a wide range of assets, including cash, funds, shares, gilts, bonds, exchange traded funds (ETFs), exchange traded commodities (ETCs) and investment trusts.
Can you put US stocks in an ISA? ›
You can hold foreign stocks and shares in a share ISA, as long as they are listed on a recognised stock exchange. There is a list of investments that ISAs may purchase at: Stocks and Shares investments for ISA managers.
Can you trade in an ISA? ›
Can I buy and sell shares within an ISA? A stocks and shares ISA is just a tax-efficient share dealing account, so you can most definitely buy and sell shares within a stocks and shares ISA. Don't forget any profits you make when you sell an investment (i.e. capital gains) will be free from capital gains tax.
