Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
British investment giant Hargreaves Lansdown has issued a strong warning against Bitcoin and other cryptocurrencies, deeming them too risky for inclusion in investor portfolios. This cautionary stance comes as the broader cryptocurrency market experienced a notable downturn early Friday, with Bitcoin and other major digital assets plunging in value following President Donald Trump’s threats of “massive” new tariffs on China.
Hargreaves Lansdown’s Stance
The Bristol, UK-based firm, which manages approximately £170 billion ($226.8 billion) in assets, advised clients that cryptocurrencies “shouldn’t be relied upon to help clients meet their financial goals.” It explicitly stated that Bitcoin, despite its positive longer-term returns, is a “highly volatile investment—much riskier than stocks or bonds.”
Hargreaves Lansdown further elaborated that its investment view is that Bitcoin is not an asset class and lacks intrinsic value. The company, however, confirmed it would permit qualified clients to invest in new British crypto exchange-traded notes (ETNs).
Contrasting Views from Financial Leaders
This conservative outlook from Hargeraves Lansdown stands in contrast to the evolving positions of other prominent financial institutions. BlackRock, the world’s largest asset manager, notably shifted its stance on Bitcoin, with CEO Larry Fink now calling it a “legit financial instrument” that can offer uncorrelated returns in investment portfolios.
BlackRock’s change of heart culminated in the successful launch of its spot Bitcoin exchange-traded fund (ETF) in 2024, following SEC approval. Similarly, hedge fund veteran Ray Dalio of Bridgewater Associates has suggested that investors allocate at least 15% of their portfolios to gold and Bitcoin as a hedge against macroeconomic risks.
Despite these endorsements, skepticism persists among some traditional finance figures, including JP Morgan CEO Jamie Dimon. While Dimon has expressed personal disbelief in Bitcoin, he maintains a policy of not dictating client investment choices, stating, “you’re the customer, I don’t like to tell customers what they can and can’t do with their money.”
Crypto Market Plunge Amid Tariff Threats
The cryptocurrency market faced significant pressure early Friday, with prices for major digital assets falling sharply. Bitcoin dropped below $119,000, marking its lowest point since October 2, and was trading down more than 2% on the day at one point.
Other leading cryptocurrencies experienced even steeper declines, with Ethereum and Solana both falling by nearly 5% within a single hour. This market reaction coincided with President Trump’s threats of “massive” tariffs on China, which also triggered a decline in global stock markets.
In response to the dip, sentiment among some traders, particularly Myriad users, shifted to a more bearish outlook regarding Bitcoin’s immediate prospects of reaching a new all-time high of $140,000 before a potential retreat to $110,000.
Key Takeaways
The recent developments underscore the ongoing debate surrounding cryptocurrency as a legitimate asset class. While some major financial players are embracing digital assets, others, like Hargreaves Lansdown, continue to highlight their inherent volatility and risk. Market movements remain susceptible to broader macroeconomic and political events, as demonstrated by the impact of President Trump’s tariff statements.
