In the latest development, a leading UK investment platform is opposing Bitcoin’s classification as an asset class. Hargreaves Lansdowne, known for being the country’s largest retail investment platform with a wide range of product offerings, insists that Bitcoin and other cryptocurrencies do not meet the criteria to be addressed as an asset class.
According to a CNBC report, Hargreaves Lansdowne released a statement warning investors to be cautious when investing in cryptocurrencies. The firm urged market participants to remain mindful of the risks attached to cryptocurrencies, including bitcoin (BTC).
UK Investment Firm Warns on Crypto ETNs
Hargreaves Lansdowne’s remarks come as the UK government lifted a ban restricting retail investors from accessing crypto exchange-traded notes (ETNs). These ETNs serve as debt instruments tied to one or more digital currencies, giving traders exposure to cryptocurrencies via regulated exchanges.
The UK Financial Conduct Authority (FCA) lifted the ban on October 8, reversing a rule that was placed in January 2021. The agency saw cryptocurrencies as extremely volatile four years ago, but growing global adoption has softened the regulator’s stance on the asset class.
Alongside the lifting of the ban, the FCA now allows investors to hold their crypto ETNs in stocks and shares Individual Savings Accounts (ISA). These accounts give up to £20,000 ($26,753) allowance per tax year.
Despite the FCA’s change of heart, Hargreaves Lansdowne still sees cryptocurrencies as extremely volatile assets and much riskier than stocks and bonds. In fact, the investment firm believes such assets have no place in portfolios looking for growth and income. The entity says investors should not rely on cryptocurrencies to meet their financial goals.
Only Appropriate Clients to Access ETNs
One of Hargreaves Lansdowne’s reasons for its stance is the difficulty of making correct performance assumptions for crypto. The firm claims cryptocurrencies have no intrinsic value. While BTC has recorded positive long-term returns, the asset has also experienced periods of extreme losses.
However, some investors view the FCA’s move as a significant breakthrough for the local crypto sector. They are willing to capitalize on the belief that the overturned ETF ban could support the growth and competitiveness of the UK’s crypto industry. Hence, Hargreaves Lansdowne intends to make some ETNs available to its clients. The catch is that only accounts deemed appropriate will be able to access the products from early next year.
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