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HSBC bans customers buying MicroStrategy shares because of bitcoin holding

MicroStrategy last week said it owned 91,579 bitcoins

HSBC -
"HSBC has no appetite for direct exposure to virtual currencies"

HSBC PLC (LON:HSBA) has confirmed it has banned private clients from buying shares of business software MicroStratgy Inc (NASDAQ:MSTR) because of concerns over the size of its pot of bitcoins.

The bank said its InvestDirect platform ‘will not facilitate buying or exchange of products related to or referencing the performance of virtual currencies' in a message to a customer seen by Reuters.

Customers who hold MicroStrategy shares on the platform can keep or sell them but can’t add to their holdings, said the message.

“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),” the bank said in a statement.

Nasdaq-listed MicroStrategy is worth about US$7bn and specialises in business intelligence software.

The group last week said it owned 91,579 bitcoins, which are currently worth US$5.5bn said Reuters or 80% of its current market value.

Since the price of bitcoin took off last October, MicroStrategy’s share price has risen almost four-fold to US$718 from US$149.

HSBC’s InvestDirect platform is available to customers in the UK and Canada and the bank said its virtual currency policy had been in place since 2018.

The stance from the Asia-focused bank contrasts with rivals, which have been edging towards acceptance of bitcoin and other major cryptos following the price surge and its appeal as an alternative to traditional fiat currencies.

Goldman Sachs and JP Morgan have stated that wealth management clients can trade bitcoin and other digital assets, while fund management giant Fidelity is trying to launch a bitcoin ETF in the US.

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