Spanish bank BBVA tells wealthy clients to invest in bitcoin

By Iain Withers

LONDON (Reuters) -Spanish lender BBVA is advising wealthy clients to invest up to 7% of their portfolio into cryptocurrencies, an executive said on Tuesday, in the latest sign some banks are warming to a sector long avoided by mainstream finance because of its risks.

BBVA's private bank advises clients to invest 3% to 7% of their portfolio in cryptocurrencies depending on their risk appetite, Philippe Meyer, head of digital & blockchain solutions at BBVA Switzerland, told the DigiAssets conference in London.

"With private customers, since September last year, we started advising on bitcoin," Meyer said. "The riskier profile, we allow up to 7% of (portfolios in) crypto."

Cryptocurrency prices have surged in recent years, with bitcoin hitting another record high in May.

That follows a recovery from lows hit in 2022 when a series of top exchanges, including FTX, collapsed, leaving millions of investors out of pocket. Their rebound has been helped by U.S. President Donald Trump's pro-crypto stance.

While many private banks execute client requests to buy cryptocurrencies, it is relatively unusual for them to advise them to actively buy them.

Regulators continue to warn about the risks of cryptocurrencies, saying investors should expect to lose all their money. The European Securities and Markets Authority said earlier this year that 95% of EU banks do not engage in crypto activities.

Speaking to Reuters on the sidelines of the event, Meyer told Reuters he believed BBVA was one of the first large global banks to advise its wealthy clients to buy cryptocurrencies. It had been executing on client requests to buy them since 2021, he said.

The 3-7% advice currently applies to bitcoin and ether, but BBVA plans to expand the advice to other cryptocurrencies later this year, he said.

Meyer said that clients had been receptive so far to the advice, and dismissed concerns the asset was too risky.

"If you look at a balanced portfolio, if you introduce 3% you already boost the performance," Meyer said. "At 3% you are not taking a huge risk."

(Reporting by Iain Withers, additional reporting by Elizabeth Howcroft; Editing by Tommy Reggiori Wilkes and Jan Harvey)