We don’t support this browser anymore.
This means our website may not look and work as you would expect. Read more about browsers and how to update them here.

Crypto statement

From Wednesday 8th October the Financial Conduct Authority (FCA) will allow some retail investors to trade crypto exchange traded notes (ETNs). The FCA’s ban on retail access to cryptoasset derivatives such as futures and options will remain in place.

At HL we believe it’s important to give our clients choice, but to do so in a way backed up by research and expertise to ensure they are aware of risks and can make the right decisions for them. You can find our view of the risks associated with investing in cryptoassets below. We will be spending the next couple of months working on ensuring our client journeys balance client need with regulatory and risk considerations before we open crypto ETN trading on the platform.

Hargreaves Lansdown investment view

Bitcoin is the largest and most widely held cryptocurrency. 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. 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. Performance assumptions are not possible to analyse for crypto, and unlike other alternative asset classes it has no intrinsic value.

Service for clients

Despite our investment view, we recognise that some clients will wish to speculate with cryptocurrency ETNs. The FCA has labelled cryptocurrency ETNs as restricted mass market investments (RMMIs). This means that they are considered high risk investments and are not appropriate for all retail clients, only those that have sufficient knowledge and experience. Clients will have to undertake an appropriateness assessment before being allowed to invest. In some cases the amount that retail investors can invest in RMMIs will be restricted to 10% of their total investment portfolio.

HL will offer appropriate clients to trade in cryptocurrency ETNs early next year following careful development of the client journey and appropriateness assessment. We will be in touch with further information in due course.

Existing crypto holdings on HL

Prior to the FCA banning the sale of crypto assets to retail clients in January 2020, HL offered clients the ability to invest into four crypto ETNs listed on the Stockholm Stock Exchange.

The FCA have only permitted HL to offer access to crypto ETNs traded on UK based stock exchanges, such as the London Stock Exchange. The London Stock Exchange have set criteria determining which crypto ETNs they will admit for trading. These criteria include that the ETNs are physically backed by underlying cryptoassets, and that the underlying cryptoasset is Bitcoin or Ethereum.

The existing Stockholm listed crypto ETNs are synthetically managed, so they do not directly own the underlying cryptoasset. The provider of these crypto ETNs (Coinbase) have launched equivalent UK listed physical crypto ETNs, which are priced in GBP. Subject to there being interest from our clients, we would look to offer these ETNs to our clients looking to invest into crypto.