Clients Respond as Investment Giant Vanguard Blocks Bitcoin ETF Access. Disrupting the trend followed by other large corporations, the $7.7 trillion asset management behemoth Vanguard has declared its intention to abstain from the recently authorized Spot Bitcoin ETFs. The decision is a welcome development in the digital asset industry, following the historic approval of eleven Spot Bitcoin ETFs by the US Securities and Exchange Commission (SEC).
Yesterday, even before the SEC’s clearance, Vanguard had already stated its position, saying they would not launch a spot Bitcoin ETF or anything else related to cryptocurrencies. The company went even further, calling the investment rationale of digital assets “weak.” The SEC’s decision to approve these investment products stands notable because it ends a decade-long trend of denial.
As an interesting aside, Vanguard’s hesitation goes beyond mere verbal resistance. As far as anyone can tell, the asset management behemoth is preventing its customers from trading the newly authorized Bitcoin investment products on its platform. Major industry heavyweights like Fidelity and BlackRock have embraced the Spot Bitcoin ETFs. Thus, this move is in striking contrast to them.
The approval from the SEC set off a flurry of trading activity on Thursday morning, with trade volumes exceeding 1.7 billion in only the first hour. But Vanguard’s doubts on the asset class remain unresolved.
According to Vanguard’s spokesman, ost cryptocurrency assets have actual economic worth and do not produce income. In addition, Vanguard’s main objective is to assist investors in generating positive absolute returns over the long run, which is seen as at odds with the extreme volatility of cryptocurrency prices.
Meanwhile, market watchers are projecting massive influxes into spot bitcoin exchange-traded funds (ETFs), with BlackRock perhaps raking in $2 billion on day one of trading, setting a new record.
There has been customer outcry over Vanguard’s decision not to participate in the recently authorized Spot Bitcoin ETFs. “I have a retirement account in Vanguard,” one consumer said, sparking a response rally. This feeling reflects the disillusionment and disappointment of several investors who hoped to access the new digital asset class via Vanguard’s platform.
Many of Vanguard’s clients have wondered how the firm plans to handle cryptocurrency investments in light of recent developments, such as the SEC’s approval of new investment channels and the companies’ apparent policy differences. In the ever-changing world of digital asset investing, how this opposing view may affect Vanguard’s position is anybody’s guess.