On October 11, the global cryptocurrency market witnessed a major sell-off after US President Donald Trump announced the imposition of a 100% additional tax on Chinese goods, while tightening control over important software exports.
This news has created significant fluctuations in the financial market, causing the S&P 500 index to decrease by nearly 3%, while major digital currencies such as Bitcoin and Ethereum fell sharply. Bitcoin, which peaked above $125,000 at the beginning of the week, dropped below $113,000 in just a few days.
With around 225 billion USD in assets under management, Hargreaves Lansdown - the UK's largest personal investment platform has issued a strong warning to customers: "Stay away from Bitcoin".
The platform said that cryptocurrencies "do not have intrinsic value" and should not be included in savings plans or retirement plans.
Sharing the same view, HL is the third largest financial institution in recent times after Deutsche Bank and Elliott Management warned customers that cryptocurrency may not be based on anything.
"Although Bitcoin's long-term profits are positive, this currency has experienced many periods of huge losses and is a very volatile, much more risky investment than stocks or bonds" - HL said.
For HL, Bitcoin is not an asset and they do not believe that cryptocurrency has characteristics that make it available in their portfolios for growth or that customers should not rely on cryptocurrency to achieve financial goals.
A few days ago, Deutsche Bank said that Bitcoin is not guaranteed by anything, although it is expected to be used by central banks as a reserve asset in the next few years.
In January, Elliott Management warned that Bitcoin would experience an inevitable collapse because it was an invisible asset.
The explanation for why cryptocurrencies do not have basic value is based on the view that other assets - stocks, bonds, cash, real estate or derivative contracts are often given to owners of platform benefits such as dividends, interest rates, land ownership rights or other legal rights. Meanwhile, cryptocurrency is just a means of exchange, with prices only reflecting the balance of supply and demand.
Analysts assess that Bitcoin's important support level is currently 100,000 USD, below which it could signal the end of the 3-year price increase cycle.
