Britain’s largest broker offers bitcoin investment

Britain’s largest online trading platform, Hargreaves Lansdown, is to allow its customers to invest in bitcoin, the alternative digital currency.

The broker, which administers £70bn of investors’ money, will give its 876,000 customers access to a fund that tracks the price of bitcoin, the best-known of a new breed of alternative currencies.

The fund, offered by a Swedish company, XBT Provider, is structured as an “exchange-traded note” (ETN). This is a fund listed on the stock exchange, meaning it can be bought and sold like a share.

XBT buys complicated “synthetic” certificates, listed in US dollars, that aim to track the price of bitcoin. The ETN itself is denominated in Swedish krona. British investors are therefore exposed to two levels of currency risk. The firm said: “The value of and any amount payable under the certificates will be strongly affected by the performance of bitcoin and the US dollar/krona exchange rate. As such an investment … is likely to be highly volatile and thus risky.”

As with any unconventional assets, investors should be extremely wary and think carefully before placing money in such assets.

Danny Cox, of Hargreaves Lansdown, said: “We have seen a handful of clients asking for the ETN, so it’s not purely driven by a provider wanting to be listed [on the Hargreaves platform].”

Hargreaves customers can hold the bitcoin investment in their selfinvested personal pension (Sipp) or a normal broking account. Mr Cox added that Hargreaves already allowed investors to access the Bitcoin Investment Trust. The $389m fund is run by Grayscale Investments, which specialises in “crypto-currencies”.

Bitcoin was launched in 2009. Online currencies are beyond the control of the world’s central banks and allow anonymous transactions. The price of bitcoin has surged since the start of the year, from less than $900 to more than $2,400 today. Currently one bitcoin equals £1,902, €2,145 or $2,422, according to CryptoCompare.com.