Hargreaves Lansdown warns UK retail investors on crypto despite FCA U-turn

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Hargreaves Lansdown has warned UK buyers over publicity to cryptocurrencies, saying bitcoin “has no intrinsic worth” regardless of a regulatory U-turn on the merchandise.

The UK’s largest retail funding platform made its assertion this week, because the Monetary Conduct Authority lifted its four-year ban on permitting British retail buyers to carry regulated crypto merchandise.

“We don’t suppose cryptocurrency has traits that imply it must be included in portfolios for development or revenue and shouldn’t be relied upon to assist purchasers meet their monetary objectives,” the agency stated in a press release. It added that “bitcoin is just not an asset class”.

Nonetheless, it didn’t rule out providing crypto merchandise on its platform. Hargreaves Lansdown stated it recognised that some prospects “will want to speculate with cryptocurrency

” and would enable some individuals entry to the merchandise from “early subsequent yr”, pending appropriateness checks.

Hargreaves Lansdown’s pushback comes because the FCA has sought to deliver the UK in keeping with different main international locations on crypto, and highlights how funding managers are nonetheless grappling with how to consider digital property. 

Hargreaves Lansdown is the UK’s largest “DIY” funding web site, permitting prospects to purchase merchandise instantly moderately than having to go through a expensive monetary adviser. The corporate was founded in 1981 and has almost a 3rd of the market, with greater than £170bn in property beneath administration and greater than 2mn prospects.

Final yr, the US authorized the launch of bitcoin change traded funds run by asset managers together with BlackRock and Constancy. Retail and institutional buyers have poured greater than $100bn into the funds. 

UK retail buyers will soon be able to buy bitcoin and ether digital tokens through regulated, exchange-listed merchandise, moderately than utilizing crypto exchanges, which aren’t recognised by the regulator.

British retail buyers will be capable to purchase merchandise listed on the London Inventory Trade by asset managers together with WisdomTree, Bitwise and 21Shares. 

In 2021, the FCA banned retail prospects from accessing listed crypto merchandise however modified its place this yr, saying the market had matured.

Hargreaves Lansdown stated it might spend “the following couple of months” assessing consumer wants and danger issues earlier than it supplies entry to crypto exchange-traded notes on its platform. 

The retail platform has taken probably the most hardline strategy to crypto. Rival platforms Interactive Investor and Saxo stated they’d supply listed crypto ETNs after they turn into obtainable on October 13.

AJ Bell, one other of the UK’s largest funding websites, stated it was reviewing the scenario and will look to supply crypto ETNs sooner or later, topic to a competency check.