'Bitcoin is not an asset class': UK's biggest investment platform has a stark warning for investors

Cryptocurrencies have long divided market watchers, with some major institutions piling into digital assets while others have warned against them.

Last month, Morgan Stanley said it was close to offering crypto trading to retail investors through its E-Trade division. The bank was the first major U.S. bank to offer wealthy clients access to bitcoin funds — a move that others have since followed.

JPMorgan, meanwhile, plans to get involved in the stablecoin space, despite CEO Jamie Dimon being vocal in his criticism of crypto. Billionaire investor Warren Buffett has also openly lashed out at cryptocurrencies.

Chris Mellor, head of EMEA ETF equity product management at Invesco, told CNBC on Thursday that he believes digital assets can offer investors a hedge against volatility in more traditional asset classes.

"Bitcoin and other cryptocurrencies are sometimes considered 'digital gold' and questions have been raised around whether bitcoin might one day replace gold as the non-fiat asset of choice," he said via email. "In our opinion, there is room for both in portfolios. With the caveat that correlations can change, in recent months we have observed that bitcoin has displayed a very low correlation with stocks, U.S. Treasuries and gold."

Meanwhile, Nigel Green, CEO of financial consultancy DeVere Group, argued that bitcoin's recent climb past the $125,000 mark was a signal that digital assets have entered the financial mainstream.

"Investors are no longer treating bitcoin as a curiosity at the edge of the market," he told CNBC. "Volatility still exists, but it is now productive volatility, the kind that accompanies price discovery in a maturing market. Short-term swings are inevitable when capital rotates at this scale."

Green labeled this "a structural realignment, not a temporary rally" for bitcoin, and pointed to the Trump administration's favorable policy mix as offering further support for its credibility.

"The hands holding bitcoin have become stronger, more institutional, and more patient," he added. "Bitcoin, for investors who take a strategic view, remains a solid, enduring investment."

— CNBC's Ryan Browne and Hugh Son contributed to this article.