Bitcoin 'Shouldn't Be Relied Upon' — This Retail Investing Giant Warned 1.5M Clients Before $19B Crypto Wipeout
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The cryptocurrency industry saw more than $19 billion in liquidations within 24 hours following President Donald Trump's new tariff announcement against China on Oct. 10. Bitcoin, which had touched new highs of $126,000 on Oct. 6, dropped to as low as $104,600 following Trump's announcement.
On Oct. 8, Hargreaves Lansdown, the biggest retail investing platform in the UK, issued a strong warning to its clients against trading cryptocurrencies, calling them risky and highly volatile. The warning came after the UK's Financial Conduct Authority lifted its ban on crypto exchange-traded notes for retail investors.
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The financial services company with 1.5 million clients said at the time that Bitcoin is "much riskier" than stocks and bonds, and the digital currency has seen "several periods of extreme losses."
"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 company said.
Hargreaves Lansdown said that unlike other alternative asset classes, Bitcoin has "no intrinsic value" and it's impossible to analyze performance assumptions for the digital currency.
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However, it acknowledged that Bitcoin is the largest and most widely held digital currency and its long-term returns "have been positive." Despite this, the company believes Bitcoin is not an asset class.
Hargreaves Lansdown said in its statement that despite the risks, many people would "wish to speculate" with crypto ETNs after the UK lifted its ban on such products. The company said it would start allowing "appropriate" clients to trade in cryptocurrency ETNs in 2026, after conducting assessments to ensure they understand the risks involved.
Though the market remains volatile, financial firms are planning to launch crypto ETFs amid rising investor appetite for riskier assets. More than 100 ETF applications related to smaller cryptocurrencies are awaiting approval from the US Securities and Exchange Commission, according to Bloomberg. T. Rowe Price Group, Inc. (NASDAQ:TROW) recently filed for approval of an ETF with the U.S. Securities and Exchange Commission that would give investors exposure to several digital currencies, including Bitcoin, Solana, Ethereum and Dogecoin, among others.
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