Hargreaves Lansdown has issued a cautionary advisory to UK investors regarding their exposure to cryptocurrencies, emphasizing that bitcoin lacks intrinsic value. This warning comes in light of a recent regulatory shift, as the Financial Conduct Authority (FCA) has rescinded its four-year ban that previously barred British retail investors from holding regulated crypto products.
The largest retail investment platform in the UK articulated its stance this week, asserting that cryptocurrencies do not possess the essential characteristics necessary for inclusion in growth or income portfolios. The firm explicitly stated that “bitcoin is not an asset class” and cautioned its clients against relying on these digital assets to achieve their financial objectives.
Despite this warning, Hargreaves Lansdown has not completely ruled out the possibility of offering cryptocurrency products on its platform in the future. Recognizing a segment of its customer base interested in speculative investments, the firm announced plans to provide access to crypto products from early next year, contingent on appropriate risk assessment tests.
This development aligns with the FCA’s recent efforts to harmonize the UK’s regulatory framework with those of other major nations regarding cryptocurrency. Hargreaves Lansdown’s stance highlights the ongoing challenges investment managers face in integrating digital assets into their business models.
Founded in 1981, Hargreaves Lansdown facilitates a direct buying process for its users, eliminating the need for costly financial advisors. The firm commands nearly a third of the UK investment market, managing over £170 billion in assets for more than two million customers.
Meanwhile, in the United States, significant acceptance of bitcoin has been evidenced by the approval of exchange-traded funds (ETFs) for bitcoin, with asset managers like BlackRock and Fidelity attracting over $100 billion in investments. The situation contrasts sharply with the UK’s previous restrictions.
Under the new regulatory framework, UK retail investors will soon have the opportunity to purchase digital tokens like bitcoin and ether through regulated, exchange-listed products. These offerings will be available on the London Stock Exchange, managed by various asset firms including WisdomTree, Bitwise, and 21Shares.
Following the FCA’s lifting of the ban on listed crypto products, which began in 2021, Hargreaves Lansdown plans to spend the upcoming months evaluating client needs and associated risks before finalizing its approach to crypto exchange-traded notes.
In the competitive landscape of UK retail investment platforms, Hargreaves Lansdown has taken a stringent stance on cryptocurrencies. Rivals such as Interactive Investor and Saxo are set to offer listed crypto exchange-traded notes beginning October 13, while AJ Bell is still assessing the situation and may consider similar offerings, pending an evaluation of client competency.
