The UK’s move to reopen the door to cryptocurrency exchange-traded notes (ETNs) is shaking up the investment landscape — but not everyone is cheering.
Just days after regulators lifted the four-year ban on retail access to crypto ETNs, Britain’s largest retail investment platform, Hargreaves Lansdown, issued a sharp warning to would-be crypto traders: “Bitcoin is not an asset class.”
The Financial Conduct Authority’s decision, effective Oct. 8, allows everyday investors to gain indirect exposure to cryptocurrencies through regulated debt instruments. These ETNs track the performance of digital tokens like bitcoin, enabling traders to tap into crypto markets without directly buying or storing coins.
The policy reversal marks a major milestone for the UK’s ambition to establish itself as a global fintech and digital asset hub. Yet the warning from Hargreaves Lansdown underscores deep divisions over whether cryptocurrencies deserve a place in mainstream portfolios.
“Crypto lacks intrinsic value, measurable fundamentals, and income potential,” the firm said in a statement. “It’s a speculative instrument — not a foundation for long-term growth or stability.”
Despite the skepticism, crypto bulls remain energized. Bitcoin has surged past $121,000, reigniting retail enthusiasm and prompting renewed institutional interest.
Caution Meets Opportunity
Hargreaves Lansdown’s caution contrasts sharply with the government’s optimism. Treasury officials argue that lifting the ban will boost market innovation and support London’s global competitiveness in digital finance.
Investors will now also be able to hold crypto ETNs in stocks and shares ISAs, allowing up to £20,000 in tax-free annual investments — a move likely to fuel fresh inflows into digital assets.
Still, the platform’s warning comes with historical weight. In 2022, during the so-called “crypto winter,” investors lost an estimated $2 trillion as token prices collapsed across the board.
“Crypto is unlike other asset classes,” the firm noted. “Even though bitcoin’s long-term performance appears impressive, it’s marked by repeated extreme drawdowns.”
Institutional Divide Widens
Traditional financial institutions remain split.
While Morgan Stanley and JPMorgan have recently expanded their crypto initiatives — with Morgan Stanley exploring retail trading via E-Trade and JPMorgan delving into stablecoins — some big names remain staunchly opposed.
Warren Buffett and Jamie Dimon, for instance, have repeatedly dismissed digital assets as speculative and unproductive.
Yet market strategists like Chris Mellor of Invesco see potential upside. “Bitcoin’s low correlation with stocks and bonds makes it an intriguing diversification tool,” he said. “It’s like digital gold — though volatility remains a serious consideration.”
‘A Structural Realignment’ for Bitcoin?
According to Nigel Green, CEO of DeVere Group, bitcoin’s latest rally signals a maturing market rather than speculative mania.
“Volatility has become part of the price discovery process,” Green told CNBC. “The hands holding bitcoin now are stronger and more institutional.”
Green argues that growing institutional adoption, combined with supportive U.S. policies, marks a “structural realignment” in how digital assets are perceived by global investors.
Hargreaves Lansdown, however, maintains its cautious stance — even as it plans to offer limited access to crypto ETNs for qualified clients by early 2026.
For now, the UK’s regulatory gamble could reshape how investors view crypto: as either the next frontier of finance or an enduring high-risk bet in a world still learning how to price digital value.
