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Vanguard Won’t Offer Bitcoin ETFs: Firm’s CEO Bashes the First Cryptocurrency

Vanguard goes against the grain, refusing to offer ETFs to its customers despite the growing demand

Vanguard's CEO, Tim Buckley, continues to resist the rising tide of customer interest in spot Bitcoin ETFs, a move that sets the firm apart from its peers who have embraced the new asset class. In a declaration that underscores Vanguard's conservative approach to investment products, Buckley stated in a company video: 

"We don't believe it belongs, like a Bitcoin ETF belongs in a long-term portfolio of someone saving for their retirement. It's a speculative asset." 

This stance comes amidst a backdrop where Bitcoin's volatility is cited as a chief concern, especially highlighted by its performance during the stock market downturn of 2022 where it mirrored the significant declines of traditional markets. 

Buckley elaborated: 

"When stocks got hammered in the recent crisis, Bitcoin went right with them. And so it is speculative. Really tough to think about how it belongs in a long-term portfolio," 

Despite the cryptocurrency reaching new heights, surpassing $73,835 recently, Vanguard remains unwavering in its position, signaling a deep-rooted belief in the speculative nature of Bitcoin and its questionable fit within the long-term investment strategies advocated by the firm.

The rationale behind Vanguard's Bitcoin ETF stance and its indirect crypto exposure

Despite Vanguard's public disavowal of Bitcoin ETFs, the investment giant's position within the cryptocurrency landscape is more nuanced than it initially appears. Following the SEC’s approval of 11 spot Bitcoin ETFs on January 10, Vanguard was quick to clarify its stance, with a spokesperson asserting: 

"Vanguard has 'no plans to offer Vanguard Bitcoin ETFs or other crypto-related products.'" 

This decision sparked discussions within the investment community, especially among crypto enthusiasts and Vanguard customers looking to diversify their portfolios with cryptocurrency assets. Among the dissenters, Coinbase’s senior engineering manager, Yuga Cohler, expressed his disapproval, opting to transfer his Roth 401(k) savings to Fidelity, a firm among the approved Bitcoin ETF providers. Cohler voiced his frustration on social media, stating: 

"Vanguard’s paternalistic blocking of Bitcoin ETFs does not fit in with my investment philosophy," 

Interestingly, Vanguard's avoidance of direct crypto products does not equate to an absence of Bitcoin exposure. The firm holds a significant stake in MicroStrategy, a company with substantial Bitcoin holdings, making Vanguard the second-largest institutional holder. As of January 12, Vanguard’s stake in MicroStrategy was reported at 8.24%.