TLDR

• ARK reports that institutional entities now hold 12.2% of Bitcoin’s total supply.
• Bitcoin’s on-chain signals show strong demand with long-term holders maintaining positions.
• Mid-sized investors have been adding to Bitcoin positions, supporting rally stability.
• Macroeconomic shifts and easing inflation may further boost Bitcoin demand.

Bitcoin’s core fundamentals remain strong as the cryptocurrency enters the final quarter of 2025, according to ARK Invest. The firm notes that on-chain metrics, such as network activity, profitability, and supply distribution, are indicating a positive outlook for Bitcoin’s price performance. As institutional involvement grows and macroeconomic factors evolve, Bitcoin could experience further upward momentum, although some caution remains due to potential market volatility.

On-Chain Metrics Indicate Strong Demand

In ARK Invest’s recent Bitcoin Quarterly report, the firm pointed to positive on-chain signals that suggest Bitcoin’s fundamentals are holding firm. The data reveals that most of the Bitcoin in circulation is in profit, with long-term holders showing little indication of selling. 

ARK Invest notes that this behavior has historically coincided with bull market phases. Additionally, the majority of Bitcoin is held by investors with a low propensity to sell, which has contributed to a more stable market.

The report also highlights the increasing role of mid-sized investors in recent months. These investors have been steadily adding to their Bitcoin positions, signaling renewed confidence in the market. Combined with a slowdown in selling from larger holders, this could suggest a more organic market rally, less reliant on speculative trading and more driven by long-term holders and institutional interest.

Institutional Adoption Reaches New Heights

ARK Invest also points to the continued growth of institutional participation in Bitcoin. The firm reports that institutional entities, including digital asset trusts and Bitcoin exchange-traded funds (ETFs), now hold over 12% of Bitcoin’s total supply. This marks a record level of institutional ownership and reflects Bitcoin’s increasing integration into traditional capital markets.

According to ARK, this rising institutional presence is beneficial for the market as it provides more stability and lessens the reliance on retail-driven volatility. Furthermore, regulated investment vehicles like ETFs and trusts continue to absorb new Bitcoin supply, which could result in a tighter available float. As more institutions add Bitcoin to their portfolios, the asset may become a more recognized component of diversified investment strategies, potentially driving further demand.

Macroeconomic Factors Could Support Growth

In addition to on-chain data and institutional involvement, ARK Invest highlights macroeconomic trends that could further benefit Bitcoin. The firm notes that inflation is under control and signs of a weakening labor market are encouraging a shift in Federal Reserve policy. This shift, along with possible government moves towards deregulation and tax reductions, could create a favorable environment for risk assets like Bitcoin.

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ARK suggests that these conditions, along with an improving macroeconomic backdrop, could lead to “productivity-led growth.” This environment has historically been supportive of risk assets, including Bitcoin, and could reinforce the positive signals already seen in the market. If these trends continue, Bitcoin’s demand could be further boosted as we approach the end of 2025.

Caution on Market Cycles

While ARK Invest maintains a bullish outlook for Bitcoin, the firm also cautions that timing will play a critical role in the market’s performance. The report notes that historical market cycles suggest there may be periods of increased volatility or consolidation. Although the fundamentals are strong, ARK warns that investors should be prepared for potential market swings as the market digests recent gains.

Despite this, ARK remains optimistic about Bitcoin’s future, given the strong on-chain signals and institutional involvement. As we move into the final months of 2025, the firm believes that these factors could create a solid foundation for continued price appreciation. However, market participants should remain vigilant, as the timing of market cycles could bring both opportunities and challenges.

ARK Invest’s report emphasizes Bitcoin’s continued strength, both in terms of its on-chain metrics and growing institutional adoption. The firm believes these factors, combined with favorable macroeconomic conditions, set the stage for potential gains in the fourth quarter of 2025. However, investors should stay mindful of possible volatility as the market continues to evolve.

TLDR

• Hargreaves Lansdown warns Bitcoin isn’t an asset class for portfolio growth.
• Hargreaves Lansdown plans crypto ETN launch in early 2026 with risk checks.
• FCA lifts crypto ETN ban, allowing Hargreaves Lansdown to offer products.
• Hargreaves Lansdown limits crypto exposure to 10% of client portfolios.

Hargreaves Lansdown, one of the UK’s leading retail investment platforms, has made a bold statement regarding Bitcoin, calling it “not an asset class.” The company has warned clients not to view Bitcoin as a reliable investment option for long-term growth or income. This comes as the firm plans to introduce crypto exchange-traded note (ETN) products to its platform in 2026, but with strict risk assessments and regulatory measures in place.

Hargreaves Lansdown’s Caution on Bitcoin

Hargreaves Lansdown has made it clear that it does not consider Bitcoin to be an asset class. Despite Bitcoin’s history of price gains, the firm argues that the cryptocurrency does not meet the fundamental criteria required for inclusion in an investment portfolio aimed at growth or income.

According to the platform, Bitcoin’s price history is characterized by significant fluctuations, including periods of extreme losses, making it difficult to assess its long-term value.

The company further states that the lack of intrinsic characteristics in Bitcoin means it should not be relied upon to achieve financial goals. As a result, Hargreaves Lansdown has advised its clients against including Bitcoin as a core part of their investment strategies.

Regulatory Environment and Plans for Crypto ETNs

Despite its reservations about Bitcoin, Hargreaves Lansdown plans to offer crypto-related products to clients starting in early 2026. This will include exchange-traded notes (ETNs) that are physically backed by Bitcoin and Ether. These products will be available only to those clients who meet a risk assessment requirement, ensuring that they understand the potential risks associated with cryptocurrency investments.

The UK’s Financial Conduct Authority (FCA) recently lifted its ban on crypto ETNs for retail investors, allowing companies like Hargreaves Lansdown to enter the market. However, there are strict conditions attached to this move.

The FCA now only allows crypto ETNs that are physically backed by Bitcoin or Ether, meaning that the underlying assets are held in reserve. These products will also be listed on a Recognised Investment Exchange (RIE), such as the London Stock Exchange, in line with traditional securities regulations.

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Risk Assessment and Exposure Limits

Before offering these crypto products, Hargreaves Lansdown plans to implement a “balanced client journey” that includes a thorough risk assessment. This will ensure that only those who fully understand the risks involved will be able to invest in crypto ETNs. 

Furthermore, the FCA’s regulations will limit clients’ exposure to cryptocurrency investments to a maximum of 10% of their portfolio. This rule aims to protect retail investors from excessive risk, considering the volatility of the crypto market.

Hargreaves Lansdown is making efforts to educate its clients about the risks of investing in cryptocurrencies. The platform emphasized that, although some investors may seek speculative exposure, Bitcoin should not be relied upon as a stable source of growth or income. This approach reflects the firm’s commitment to ensuring that its customers are making informed decisions.

Future Outlook for Crypto Products

Hargreaves Lansdown’s plans to offer crypto ETNs represent a significant shift in the UK investment landscape. However, the firm remains cautious in its approach, ensuring that it complies with the new regulatory standards set by the FCA.

While it acknowledges that some clients may still want to invest in cryptocurrency, the company stresses that these investments should be made with full awareness of the associated risks.

The firm’s decision to limit crypto exposure to a small portion of a client’s portfolio aligns with broader trends in the market, where regulatory bodies are taking steps to provide greater investor protection in the volatile crypto space. By offering physically backed crypto ETNs, Hargreaves Lansdown aims to provide a more secure way for investors to gain exposure to digital assets while minimizing risk.