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Bitcoin makes ground shrugging off HSBC bank chief’s doubts

HSBC


Bitcoin made up some lost ground yesterday after plunging by a quarter last week, even as the boss of HSBC said that his bank had no plans to enter the market.

The world’s best-known digital coin was changing hands for $39,039.25, up by 10.9 per cent, or $3,830.75, on the day. Last month it hit an all-time high a fraction shy of $65,000.

Bitcoin’s recent losing streak began this month when Elon Musk, the boss of Tesla, the electric car company, said that the cryptocurrency network’s electricity usage was “insane” and not environmentally friendly. Musk also stopped Tesla’s customers from buying its vehicles using digital currencies. Last week Beijing and Washington expanded their crackdowns on digital currency markets.

In an interview with Reuters yesterday, Noel Quinn, chief executive of HSBC, Europe’s largest bank, said: “Given the volatility, we are not into bitcoin as an asset class. If our clients want to be there, then of course they are, but we are not promoting it as an asset class within our wealth management business.

“I view bitcoin as more of an asset class than a payments vehicle, with very difficult questions about how to value it on the balance sheet of clients because it is so volatile.”

HSBC’s stance on bitcoin runs counter to that of several other big banks, including Goldman Sachs, which recently restarted its cryptocurrency trading desk. Other banks have launched services that allow clients to trade in bitcoin and similar cryptocurrencies.

Quinn, said that HSBC was also “not rushing into stablecoins”, such as Tether, which is pegged to the value of the US dollar. Stablecoins “do have some reserve backing behind them to address the stored value concerns, but it depends on who the sponsoring organisation is, plus the structure and accessibility of the reserve”, he said.

HSBC has banned customers of its online trading service from buying shares in MicroStrategy, which has bought considerable amounts of bitcoin in recent months. The bank told clients that it would not facilitate the trading of products related to virtual currencies.

Last night Musk hailed “potentially promising” talks with bitcoin miners, who he said have committed to publicly disclosing their renewable energy usage and asking counterparts around the world to follow suit.



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