The UK's largest retail investment platform: Bitcoin is not an asset and should not appear in your investment portfolio

The UK's largest retail investment platform, Hargreaves Lansdown, recently issued a warning to investors, stating that Bitcoin is not an asset class and should not be included in investment portfolios. The company stated: “HL Investment View believes that Bitcoin is not an asset class, and we think cryptocurrencies do not possess the characteristics to be included in growth or income portfolios.” This warning comes as the UK relaxes cryptocurrency regulations. On October 8, the UK lifted a long-standing ban on retail investors accessing cryptocurrency exchange-traded notes (ETNs). Previously, the UK government also announced on Wednesday that investors would be able to hold crypto ETNs in stocks and shares ISA accounts, which allow tax-free investments of up to £20,000 per year. Hargreaves Lansdown emphasized the high-risk characteristics of cryptocurrencies, stating that "unlike other alternative asset classes, it has no intrinsic value." Nevertheless, the company acknowledged that some traders wish to "speculate on crypto ETNs," and will begin offering such opportunities to "suitable clients" starting in early 2026. As of the time of writing, Bitcoin is trading at approximately $121,603. Regulatory Easing Triggers Platform Warning The UK government's lifting of the ETN ban has been hailed by cryptocurrency companies as a significant breakthrough for the industry in the UK. The government previously announced that this move would support "the growth and competitiveness of the UK cryptocurrency industry." The new regulations allow retail investors to access digital tokens through regulated exchanges, with ETNs serving as debt instruments linked to one or more specific assets. However, Hargreaves Lansdown takes a cautious stance on this. The company urges UK retail investors to remain cautious under the new regulations. The platform stated in a statement: "The performance assumptions of cryptocurrencies cannot be analyzed, and unlike other alternative asset classes, it has no intrinsic value." The government also allows investors to hold crypto ETNs in ISA accounts, meaning investors can invest up to $26,753 in cryptocurrency products within the tax-free allowance each year. The platform further emphasized the extreme volatility of cryptocurrencies like Bitcoin. While acknowledging that Bitcoin's long-term returns are positive, Hargreaves Lansdown warns investors: “Bitcoin has experienced several periods of extreme losses and is a high-volatility investment—its risks far exceed those of stocks or bonds.” This viewpoint is based on historical data, such as the "crypto winter" of 2022, which led to losses of up to $2 trillion for investors. Therefore, the platform believes that cryptocurrencies should not be relied upon to help clients achieve their financial goals. Wall Street Institutions Have Mixed Attitudes The value of cryptocurrencies has long been a focal point of debate among market observers, and large financial institutions hold differing views on this. In the United States, some mainstream institutions are actively embracing digital assets. Reports indicate that Morgan Stanley is close to offering cryptocurrency trading services to retail investors through its E-Trade division, making it the first major U.S. bank to provide Bitcoin fund investment channels to its wealthy clients Other banks have also followed suit. JP Morgan plans to enter the stablecoin space, despite its CEO Jamie Dimon having a critical stance on cryptocurrencies. Additionally, billionaire investor Warren Buffett has publicly criticized cryptocurrencies. Among a broader group of experts, opinions on cryptocurrencies are similarly polarized. Chris Mellor, head of ETF equity product management for Europe, the Middle East, and Africa at Invesco, stated on Thursday that digital assets can provide investors with tools to hedge against volatility in traditional asset classes. He said: "Bitcoin and other cryptocurrencies are sometimes seen as 'digital gold'... We believe there is room for both in a portfolio." He noted that in recent months, the correlation between Bitcoin and stocks, U.S. Treasuries, and gold has been very low. On the other hand, Nigel Green, CEO of financial consulting firm deVere Group, believes that Bitcoin's recent breakthrough of the $125,000 mark signifies that digital assets have entered the financial mainstream. He stated: "Investors no longer view Bitcoin as a curiosity on the fringes of the market... This is a structural adjustment, not a temporary rebound." Green pointed out that the favorable policy mix from the Trump administration has further supported its credibility, and "the hands holding Bitcoin have become stronger, more institutionalized, and more patient."