UK's Hargreaves Lansdown: Bitcoin Not an Asset Class Despite Crypto ETN Plans

Hargreaves Lansdown, one of Britain's largest retail investment platforms, has cautioned investors against treating Bitcoin as a core portfolio component, even as the firm prepares to introduce cryptocurrency products for the first time. The Bristol-based company stated that despite Bitcoin's long-term price appreciation, it "is not an asset class" and lacks fundamental characteristics necessary for portfolio inclusion for growth or income purposes. The platform highlighted Bitcoin's history of "extreme losses" and noted that performance assumptions are impossible to analyze reliably, warning that the cryptocurrency shouldn't be depended upon to achieve financial objectives. This announcement follows the UK Financial Conduct Authority's (FCA) recent lifting of its four-year ban on crypto exchange-traded notes (ETNs) for retail investors. Hargreaves Lansdown plans to develop a "balanced client journey" over several months, requiring detailed risk warnings and appropriateness assessments before investment access. Qualified investors will face a 10% portfolio limit on crypto exposure under FCA regulations. The FCA will permit only physically-backed Bitcoin or Ether ETNs listed on Recognised Investment Exchanges like the London Stock Exchange, applying traditional securities standards for disclosure and investor protection. While maintaining its skeptical stance on Bitcoin's portfolio role, the company acknowledged client demand for speculative exposure and expects to launch crypto ETN access by early 2026, potentially featuring pound-denominated products from issuers including 21Shares, CoinShares and WisdomTree.