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Bitcoin is too risky to include in investors’ portfolios, according to the UK’s largest retail investment platform.
“Bitcoin has experienced several periods of extreme losses and is a very volatile investment – much riskier than stocks or bonds,” $225 billion asset manager Hargreaves-Lansdown said last week. “HL (Hargreaves Lansdown) Investment’s view is that bitcoin is not an asset class, and we do not believe that cryptocurrency has characteristics that mean it should be included in portfolios for growth or income purposes and should not be relied upon to help clients achieve their financial goals.”
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Hargreaves Lansdown added that, in his view, cryptocurrencies have “no intrinsic value.”
Hargreaves Lansdown’s statement was published last week by the Financial Conduct Authority. overturned a nearly six-year ban on the retail trading of cryptocurrency spot exchange-traded notes. While competitors like Interactive Investor And Sax have widely opened their doors to cryptocurrency ETNs, HL said it will take the remaining months of the year to develop “the customer journey and suitability assessment”, before offering cryptocurrency ETN trading to “suitable customers”.
Meanwhile, under FCA rules, retail investors will be limited to Bitcoin and Ethereum-based products on UK exchanges, such as the London Stock Exchange, Hargreaves Lansdown said. Investors may also be limited to allocating up to 10% of their portfolio to cryptocurrency ETNs.
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Hargreaves Lansdown’s statement aligns with sentiments from JPMorgan Chase (NYSE:JPM) CEO Jamie Dimon.
“I personally don’t believe in Bitcoin itself, but you are the customer. I don’t like telling customers what they can and can’t do with their money,” Dimon said CNBC in August.
Nonetheless, the prevailing trend suggests that institutions are increasingly adopting cryptocurrencies. Among the major institutional backers of cryptocurrencies is the world’s largest asset manager, BlackRock (NYSE:BLACK).
“Crypto has a role in the same way as gold, which is to say it is an alternative,” said the BlackRock CEO. Larry Fink said CBS’s “60 Minutes” in an interview broadcast on Sunday, while going back to 2017, noted that Bitcoin was an “indication of money laundering.”
