UK Investment Firm Warns Against Crypto in Portfolios Despite New Regulations
A major U.K. trading platform, Hargreaves Lansdowne, issued a warning to investors today, advising them that cryptocurrencies should not be included in investment portfolios despite recently relaxed regulations allowing access to crypto exchange-traded notes (ETNs).
The longstanding ban on retail investors accessing crypto ETNs was lifted on October 8th, offering traders exposure to digital tokens through a regulated exchange. However, Hargreaves Lansdowne cautioned against this new opportunity, stating, “The HL Investment view is that bitcoin is not an asset class, and we do not think cryptocurrency has characteristics that mean it should be included in portfolios for growth or income and shouldn’t be relied upon to help clients meet their financial goals,” and further noting that “Performance assumptions are not possible to analyse for crypto, and unlike other alternative asset classes it has no intrinsic value.” This caution comes as increased crypto adoption could significantly impact traditional investment strategies.
The government’s decision to overturn the ETN ban earlier this year was intended to support the growth of the U.K.’s crypto industry, and yesterday announced investors can now hold crypto ETNs in stocks and shares ISA accounts, allowing for up to £20,000 ($26,753) a year in tax-free investments. Despite the potential for gains – Bitcoin was last trading around $121,508 – Hargreaves Lansdowne emphasized the inherent volatility of cryptocurrencies, recalling the $2 trillion lost during the 2022 “crypto winter.” For more information on understanding investment risk, see the Financial Conduct Authority’s guidance.
While some institutions, like Morgan Stanley, are moving towards offering crypto trading to retail investors, and JPMorgan is exploring stablecoins, others remain skeptical. Experts like Chris Mellor of Invesco suggest digital assets could offer a hedge against traditional market volatility, noting Bitcoin’s low correlation with stocks, U.S. Treasuries, and gold. However, officials stated they will offer access to crypto ETNs to “appropriate clients” starting in early 2026, acknowledging the speculative nature of the market.
