Vanguard Investment Manager Rejects Providing Bitcoin Spot ETF, Users Protest!
Vanguard, managing funds worth $2.3 trillion and ranking among the top five issuers globally based on ETF assets, has opted not to participate in Bitcoin spot ETFs.
According to The Wall Street Journal report, Vanguard has stated that it will not offer a new Bitcoin spot ETF and has no plans to provide other crypto-related products because they do not align with its offerings focused on traditional assets.
"Our perspective is that these products do not align with our offerings that focus on asset classes such as equities, bonds, and cash, which Vanguard sees as the foundation of a balanced long-term investment portfolio," said an unnamed representative from Vanguard.
Vanguard Users Protest and Redirect Assets
Vanguard's decision has been protested by some of its users, including Coinbase's senior technical manager, Yuga Cohler, who stated that he would transfer his Roth 401(k) savings from Vanguard to Fidelity. "Vanguard's paternalistic blocking of Bitcoin ETF does not align with my investment philosophy," Cohler added.
Bitcoin commentator Neil Jacobs mentioned that he is in the process of transferring funds from Vanguard in response to the company's decision.
According to Bloomberg ETF analyst Eric Balchunas, Vanguard's rejection of Bitcoin is not surprising. For instance, Vanguard's founder, John Bogle, warned investors in November 2017 to "avoid Bitcoin like the plague."
Chief Investment Officer Greg Davis also referred to crypto as "more of a speculative asset class" in May 2022. He added at that time that while the company finds blockchain technology interesting, crypto is not suitable from an investment perspective.
Despite being cautious about crypto, Vanguard has not shied away from Bitcoin-related investments. The asset manager holds a 9% stake in MicroStrategy (MSTR), one of the largest institutional owners of Bitcoin.
They have also invested in stocks of Bitcoin mining companies like Riot Platforms and Marathon Digital last year.
Not only Vanguard, but investment managers State Street and Charles Schwab, each managing funds of $1 trillion and $315 million, respectively, have also decided not to engage in Bitcoin spot ETFs.
On the other hand, Merrill Lynch, owned by Bank of America, has not yet decided to join the Bitcoin spot ETF.
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