UK investment platform warns traders to avoid bitcoin and cryptocurrencies

A major UK trading platform has issued a stark warning to investors hoping to benefit from relaxed cryptocurrency rules: Cryptocurrencies should not be in your investment portfolio.

A long-standing UK ban on retail investors’ ability to access exchange-traded crypto securities (ETNs) It has been uploaded On October 8th. Exchange-traded bonds are debt instruments linked to one or more specified assets. In this case, it gives traders exposure to digital tokens through the use of a regulated exchange.

The new rules have sparked a warning from Hargreaves Lansdowne – the UK’s largest retail investment platform – which has urged British retail investors to be cautious.

“HL Investment’s view is that bitcoin is not an asset class, we do not believe that cryptocurrency has characteristics that mean it should be included in portfolios to generate growth or income and should not be relied upon to help clients achieve their financial goals,” Hargreaves-Lansdown said in a statement.

“Performance assumptions for cryptocurrencies cannot be analyzed and, unlike other alternative asset classes, have no intrinsic value.”

When UK officials announced earlier this year that the ETN ban would be scrapped, they argued that the move would support “the growth and competitiveness of the UK cryptocurrency industry.” Cryptocurrency companies have hailed this as a major achievement for the sector in Britain.

The government also ruled on Wednesday that investors will be able to hold exchange-traded notes (ETNs) in stocks and shares ISAs, an account in which up to £20,000 ($26,753) a year can be invested tax-free.

Cryptocurrencies, which are decentralized and therefore not regulated by central authorities such as governments, have their detractors and their prices are notably volatile. In 2022, the so-called “crypto winter” Investors saw a loss of $2 trillion. Bitcoin – The most widely traded cryptocurrency – has generated significant returns for early investors, and was last seen trading at around $121,508.

However, Hargreaves Lansdowne urged investors to consider the risks associated with all cryptocurrencies, including Bitcoin.

“Although Bitcoin’s long-term returns have been positive, Bitcoin has seen several periods of heavy losses and is a highly volatile investment – ​​far riskier than stocks or bonds,” the company said in its statement this week.

However, the company said it recognized that some traders wished to “speculate using exchange-traded currency notes” and that it would therefore offer “suitable clients” the opportunity to do so from early 2026.

Last month, Morgan Stanley said it was Close to offering cryptocurrency trading For individual investors through the e-commerce department. It was the bank The first major American bank To provide wealthy customers with access to Bitcoin funds – a move that others have since followed.

Meanwhile, J.P. Morgan. Plans to get involved in the stablecoin spacedespite being CEO Jamie Dimon He is outspoken in his criticism of cryptocurrencies. Billionaire investor Warren Buffett has also spoken out criticize In cryptocurrencies.

Chris Mellor, head of EMEA equity ETF product management at Invesco, told CNBC on Thursday that he believes digital assets can provide investors with a hedge against volatility in traditional asset classes.

“Bitcoin and other cryptocurrencies are sometimes considered ‘digital gold,’ and questions have been raised about whether bitcoin might one day replace gold as the non-fiat asset of choice,” he said via email. “In our view, there is room for both in portfolios. With the caveat that correlations can change, we have observed in recent months that Bitcoin has shown a very low correlation with stocks, US Treasuries and gold.”

Meanwhile, Nigel Green, CEO of financial advisory firm DeVere Group, said bitcoin’s recent rise above $125,000 was a signal that the digital asset had entered the financial mainstream.

“Investors are no longer treating bitcoin as a curiosity on the edge of the market,” he told CNBC. “Volatility is still there, but it is now productive volatility, of the kind that accompanies price discovery in a mature market. Short-term volatility is inevitable when capital rotates on this scale.”

Green described this as a “structural realignment, not a temporary rally” for Bitcoin, and noted Favorable policy mix for the Trump administration It also provides further support for its credibility.

“The hands that own Bitcoin have become stronger, more institutionalized and more patient,” he added. “For investors who take a strategic point of view, Bitcoin remains a solid and durable investment.”

— CNBC’s Ryan Brown and Hugh Soon contributed to this article.