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Hargreaves Lansdown has warned UK investors over exposure to cryptocurrencies, saying bitcoin “has no intrinsic value” despite a regulatory U-turn on the products.
The UK’s biggest retail investment platform made its statement this week, as the Financial Conduct Authority lifted its four-year ban on allowing British retail investors to hold regulated crypto products.
“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,” the firm said in a statement. It added that “bitcoin is not an asset class”.
Still, it did not rule out offering crypto products on its platform. Hargreaves Lansdown said it recognised that some customers “will wish to speculate with cryptocurrency [products]” and would allow some people access to the products from “early next year”, pending appropriateness tests.
Hargreaves Lansdown’s pushback comes as the FCA has sought to bring the UK in line with other major countries on crypto, and highlights how investment managers are still grappling with how to think about digital assets.
Hargreaves Lansdown is the UK’s largest “DIY” investment site, allowing customers to buy products directly rather than having to go via a costly financial adviser. The company was founded in 1981 and has nearly a third of the market, with more than £170bn in assets under administration and more than 2mn customers.
Last year, the US approved the launch of bitcoin exchange traded funds run by asset managers including BlackRock and Fidelity. Retail and institutional investors have poured more than $100bn into the funds.
UK retail investors will soon be able to buy bitcoin and ether digital tokens via regulated, exchange-listed products, rather than using crypto exchanges, which are not recognised by the regulator.
British retail investors will be able to buy products listed on the London Stock Exchange by asset managers including WisdomTree, Bitwise and 21Shares.
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In 2021, the FCA banned retail customers from accessing listed crypto products but changed its position this year, saying the market had matured.
Hargreaves Lansdown said it would spend “the next couple of months” assessing client needs and risk considerations before it provides access to crypto exchange-traded notes on its platform.
The retail platform has taken the most hardline approach to crypto. Rival platforms Interactive Investor and Saxo said they would offer listed crypto ETNs when they become available on October 13.
AJ Bell, another of the UK’s largest investment sites, said it was reviewing the situation and could look to offer crypto ETNs in the future, subject to a competency test.
