Don’t invest your savings in Bitcoin, says ex-Chancellor Lord Hammond (who works for crypto firm!)
- Hammond became a senior adviser at Copper, which builds cryptocurrency trading tools for institutional investors
- However, he cautioned retail investors against ploughing funds into cryptocurrencies, which include Bitcoin and Ethereum
- Copper was founded in 2018 and was valued last month at $3billion in a funding round which raised $500million
Warning shot: Lord Hammond
Former Chancellor Lord Hammond has urged armchair investors to be ‘extremely cautious’ about putting their savings into cryptocurrencies – despite taking an advisory role at a British digital currency specialist.
Hammond became a senior adviser at Copper, which builds cryptocurrency trading tools for institutional investors, in October. However, he cautioned retail investors against ploughing funds into cryptocurrencies, which include Bitcoin and Ethereum.
He told The Mail on Sunday: ‘If a member of my family was asking me [whether to invest in crypto], I think what I’d do is draw their attention to the fact that large and reputable established asset managers are now increasingly dipping their toe. But it is dipping a toe – it’s a tiny proportion of their asset base exposed to what is a highly volatile asset class.’
He added: ‘It’s almost certainly not suitable for retail investors as a mainstream investment category. I know plenty of people who have a small exposure to crypto assets but it is money they’ve written off. It’s gambling money. I think people should be extremely cautious. Many regard them as closer to gaming than serious investing.’
Copper was founded in 2018 and was valued last month at $3billion in a funding round which raised $500million. The British company helps investors to protect their crypto holdings against cybercrime. Hammond provides strategic advice to the company and promotes the UK as a digital asset hub. Investor appetite is growing for cryptocurrencies and digital assets such as ‘non fungible tokens’ – which are bought online.
However, punters can be caught by wild swings in their price. Bitcoin is up 75 per cent this year but has fallen 11 per cent this month, to trade at £38,000.
Hammond said he would not have joined a business focused on retail trading of cryptocurrencies, but said the ‘distributed ledger’ technology which underpins digital currencies will ‘eventually encompass the whole of what we currently think of as financial services’. ‘
My job with Copper is to raise the profile of this debate, make sure people are aware that there’s a huge opportunity here,’ he said. The Conservative life peer was Chancellor from 2016 to 2019, earning the nickname ‘Spreadsheet Phil’ due to his cautious grip on the UK’s purse strings.
Hammond cautioned retail investors against ploughing funds into cryptocurrencies, which include Bitcoin and Ethereum
He joined the Lords last year. The Remainer said that there was a ‘window of opportunity’ for London to rapidly build its digital currency industry post-Brexit.
Industries built around digital currencies have grown rapidly in China and the US, and Hammond said: ‘We can grasp the opportunities of new technology and leverage the fact that whatever some of our friends in Europe might like to think, London is still the dominant financial services centre in the European continent.
‘I think we do need to get our skates on… we really cannot allow Germany to come to be seen as a more serious player than us.’
The Bank of England and the Treasury will next year begin a consultation on whether to launch a Central Bank Digital Currency used by households and businesses, to sit alongside cash and bank deposits, rather than replace them.
Exclusive data from digital advertising technology firm Dianomi shows Bitcoin and Ethereum are the most commonly viewed cryptocurrencies by prospective investors, followed by Ripple, Monero and Litecoin.