Major UK trading platforms have issued a stern warning to investors hoping to capitalize on new cryptocurrency regulations: Cryptocurrency should not be included in investment portfolios.
A long-standing UK rule that prohibited retail investors from participating in cryptocurrency exchange-traded notes (ETNs) was lifted on October 8th. ETNs are debt instruments tied to one or more specific assets. In the cryptocurrency sector, these notes provide investors with access to digital tokens through regulated exchanges.
The new regulations prompted a warning from Hargreaves Lansdowne, the UK's largest retail investment platform, which urged caution among UK retail investors.
"HL's investment view is that Bitcoin is not an asset class. We believe cryptocurrencies do not possess the attributes to be included in a portfolio for growth or income, and should not be relied upon to help clients achieve their financial goals," the platform said in a statement. "The performance of cryptocurrencies cannot be rationally analyzed, and unlike other alternative assets, they do not possess intrinsic value."
Earlier this year, when UK officials announced they would lift the ban on cryptocurrency ETNs, they said the move would help "promote the development and competitiveness of the UK cryptocurrency industry." At the time, cryptocurrency companies widely hailed the decision as a major breakthrough for the UK crypto sector.
Furthermore, on Wednesday (October 8), the UK government also stipulated that investors can include cryptocurrency ETNs in stocks and shares individual savings accounts (ISAs), which can hold up to £20,000 (approximately $26,753) annually and receive tax-free savings.
High returns come with high losses
Cryptocurrencies, due to their decentralized nature and lack of regulation by central authorities such as governments, have long been controversial, and their price volatility is well known. During the "crypto winter" of 2022, investors suffered cumulative losses of $2 trillion. However, as the most traded cryptocurrency, Bitcoin has delivered substantial returns to early investors, currently trading at around $121,508.
Nevertheless, trading platform Hargreaves Lansdowne emphasizes the need for investors to fully consider the risks of all cryptocurrencies, including Bitcoin.
In a statement released this week, the platform noted: "While Bitcoin has demonstrated positive long-term returns, it has experienced multiple periods of extreme losses and is a highly volatile investment—considerably riskier than stocks or bonds."
However, the company also stated that it recognizes that some traders seek "speculative exposure through cryptocurrency ETNs" and plans to offer such trading opportunities to "qualified clients" starting in early 2026.
Diverging Institutional Positions
Market observers have long been divided on cryptocurrency: some large institutions are actively investing in digital assets, while others have issued risk warnings.
Last month, Morgan Stanley announced that it would soon offer cryptocurrency trading services to retail investors through its E-Trade division. Morgan Stanley previously became the first major US bank to open its Bitcoin fund to high-net-worth clients, a move that has since been followed by several other banks.
Meanwhile, while JPMorgan Chase plans to enter the stablecoin space, its CEO, Jamie Dimon, has repeatedly publicly criticized cryptocurrencies. Billionaire investor Warren Buffett has also publicly criticized cryptocurrencies.
