'Crypto has no intrinsic value': UK's top retail platform warns investors

UK's top retail investment platform, Hargreaves Lansdown, has said cryptocurrency performance cannot be reliably analysed and shouldn't be trusted to help clients meet their financial goals

Adding to the debate over whether cryptocurrency is a good investment, the United Kingdom’s (UK) largest retail investment platform, Hargreaves Lansdown, has stated that Bitcoin is not an asset class and cautioned investors against relying on it.

 

“The Hargreaves Lansdown 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,” Hargreaves Lansdowne said, as quoted by CNBC.

 

It said that cryptocurrency performance cannot be reliably analysed, adding, "unlike other alternative asset classes, it has no intrinsic value".

 

The statement came after the British government, on October 8, lifted a ban allowing British retail investors to hold regulated crypto products, the Financial Times reported. The development will enable digital tokens like Bitcoin and Ether to be listed on the London Stock Exchange through regulated products. 

 

Further elaborating on its stand against crypto, the firm said, “While longer-term returns of bitcoin have been positive, bitcoin has experienced several periods of extreme losses and is a highly volatile investment — much riskier than stocks or bonds".

 

Bitcoin, the world’s largest cryptocurrency, reached a new lifetime peak of $126,198 on October 7, following which it has retraced modestly. At last check, the world’s largest cryptocurrency was quoted at $121,077, down 0.68 per cent over the past 24 hours, according to data from CoinMarketCap.

 

Despite its scepticism towards cryptocurrency, Hargreaves Lansdown has not ruled out the possibility of introducing crypto products on its platform, acknowledging investor interest. It added that “appropriate clients” would get an opportunity to trade such products on its platforms from "early next year".

 

Cryptocurrency has always been a subject to stark debate due to its volatility. However, recently, some major banks have started embracing them due to investor interest. Last month, United States (US)-based Morgan Stanley said that it was close to offering crypto trading to retail investors via E-Trade. Meanwhile, JPMorgan plans to enter the stablecoin market, even as its chief Jamie Dimon publicly criticised cryptocurrencies, reported CNBC.