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Bitcoin is too risky to be included in investors’ portfolios, says the UK’s largest retail investment platform.
“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 Lansdown he said last week. “HL (Hargreaves Lansdown) Investment’s view is that bitcoin is not an asset class, and we do not believe the cryptocurrency has characteristics that mean it should be included in portfolios for growth or income and should not be relied upon to help clients achieve their financial goals.”
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Hargreaves Lansdown added that, in his opinion, 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 sax have largely opened their doors to cryptocurrency ETNs, HL said it will take the remaining months of the year to put together “the customer journey and suitability 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 UK 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.
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Hargreaves Lansdown’s statement aligns with the JPMorgan Chase (NYSE:JPM) CEO’s sentiments Jaime Dimon.
“I personally don’t believe in Bitcoin per se, but you’re the customer; I don’t like telling 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. Prominent institutional backers of cryptocurrencies include the world’s largest asset manager, BlackRock (NYSE:BLK).
“Cryptocurrencies have a role in the same way as gold, that is, it is an alternative,” said the BlackRock CEO. Larry Fink he told CBS’ “60 Minutes” in an interview broadcast Sunday, while looking back at 2017 by commenting that Bitcoin was an “index of money laundering.”