UK's Biggest Retail Investment Platform Warns Against Including Bitcoin In Your Portfolio: 'Not An Asset Class,' 'No Intrinsic Value'
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Bitcoin is too risky to be included in investors’ portfolios, U.K.’s biggest retail investment platform says.
“Bitcoin has experienced several periods of extreme losses and is a highly volatile investment – much riskier than stocks or bonds,” $225 billion asset manager Hargreaves Lansdownsaid last week. “The HL [Hargreaves Lansdown] Investment view is that bitcoin is not an asset class, and 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.”
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Hargreaves Lansdown added that, in its view, cryptocurrencies have “no intrinsic value.”
Hargreaves Lansdown’s statement came as the Financial Conduct Authority last week overturned a nearly six-year ban on the retail trading of spot cryptocurrency exchange-traded notes. While competitors like Interactive Investor and Saxo have largely opened their doors to cryptocurrency ETNs, HL said it will take the remaining months of the year to craft “the client journey and appropriateness assessment,” before offering cryptocurrency ETN trading to “appropriate clients.”
Meanwhile, under FCA rules, retail investors will be limited to Bitcoin- and Ethereum-based products on U.K. exchanges, such as the London Stock Exchange, Hargreaves Lansdown said. Investors may also be limited to allocating only up to 10% of their portfolio in cryptocurrency ETNs.
Trending: If there was a new fund backed by Jeff Bezos offering a 7-9% target yield with monthly dividends would you invest in it?
Hargreaves Lansdown’s statement aligns with sentiments from JPMorgan Chase (NYSE:JPM) CEO Jamie Dimon.
“I’m not personally a believer in Bitcoin itself, but you’re the customer—I don’t like to tell customers what they can and can’t do with their money,” Dimon told CNBC in August.
Still, the prevailing trend suggests that institutions are increasingly embracing cryptocurrencies. Among the prominent institutional backers of cryptocurrencies is the world’s largest asset manager, BlackRock (NYSE:BLK).
“There is a role for crypto in the same way there is a role for gold, that is, it’s an alternative,” BlackRock CEO Larry Finktold CBS' "60 Minutes" in an interview aired on Sunday, while walking back 2017 remarks that Bitcoin was an “index of money laundering.”
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