HSBC is not that interested in Bitcoin, bans MicroStrategy Stock.
Now that HSBC is not letting traders on its investing platform dabble in MicroStrategy stock, will it implement its anti-crypto policy to Coinbase shares?
One of the largest banks in the world, HSBC already blocks transfer from cryptocurrency exchanges to its client accounts. It has taken its anti-crypto policy a step further.
That bank confirmed that it no longer allows the customers to trade MicroStrategy stock because of the company’s significant Bitcoin holdings.
In a message last March 29 to a client on HSBC’s InvestDirect stock trading platform, the bank stated that it had “changed the policy on virtual currencies” and virtual currency-related products. As a result, clients cannot purchase or transfer such assets anymore, although they can continue to hold or sell them.
“HSBC has no appetite for direct exposure to virtual currencies and limited appetite to facilitate products or securities that derive their value from VCs (virtual currencies),”
Microstrategy controls over 91,000 BTC; the cryptocurrency comprises 80% of its treasury, this means that the company’s day-to-day fortunes are contingent on Bitcoin’s market price. So far, the strategy has somehow worked. MicroStrategy has converted its $2.2 billion investment to nearly $5.5 billion as Bitcoin’s price has risen to record highs.
It isn’t clearly enough to convince HSBC to make MicroStrategy stock available to the Canadian and British retail traders. The London-based HSBC’s approach stands in contrast to investment banks like BNY Mellon and Morgan Stanley, which have jumped into Bitcoin trading activities. Stanley even bought a 10% stake in MicroStrategy last December.
For the meantime, HSBC falls in the “blockchain, not Bitcoin” camp, having worked with some global banks to run a permissioned blockchain for transactions, Contour.
This timing creates a tricky decision for HSBC, as it comes closer to Coinbase’s direct listing. Shares in the San Francisco-based crypto exchange began trading on Nasdaq this coming Wednesday, but it is not clear if HSBC regards it as a virtual currency “product” with the company’s holdings that are primarily in fiat. After Coinbase reported its first quarter earnings with an estimated profit of $730 – $800 million, its stocks could be in high demand.
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