Hargreaves Lansdown goes slow on crypto

For the past four years, the Financial Conduct Authority has stopped British retail investors from accessing crypto products traded on regulated exchanges. That ban ended last Wednesday, as part of a general shift from crypto-scepticism to crypto-friendliness by UK authorities.

This shift has divided the main investment platforms used by British retail investors. Interactive Investor and Saxo, two leading platforms, will start offering shares in funds composed of coins. But the market leader, Hargreaves Lansdown, will not for now. Instead, it will spend “the next couple of months” assessing client needs and risk considerations, before potentially giving access to investors who pass “appropriateness tests”.

Hargreaves Lansdown regards crypto as essentially speculative, saying that bitcoin has “no intrinsic value”, is “not an asset class” and that cryptocurrency “shouldn’t be relied upon to help clients meet their financial goals”.

This may take risk aversion too far. Some, not all, crypto products fall into the category of “avoid unless you are willing to risk losing all the money you invest”. Even Andrew Bailey, governor of the Bank of England, has said that something with real value could emerge from the crypto world.

Provided the risks are made clear, why not encourage retail investors to take a chance with a small slice of their money?