Vanguard CEO shoots down possibility of launching spot BTC ETF despite firms disclosing $100M+ in assets
- Vanguard brought in a new CEO, Salim Ramji, who has a background in heading BlackRock's global ETF business.
- On January 24, Vanguard indicated that it did not have plans to create a BTC ETF or other crypto-related products or feature other issuers.
- Ramji will not assume the position until July but commits not to reverse Vanguard’s decision not to launch a Bitcoin ETF.
- Firms with over $100 million in assets continue to disclose BTC ETF shares.
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Spot Bitcoin exchange-traded funds (ETFs) remain an abounding fundamental in the cryptocurrency market since the landmark approval on January 10 and subsequent launch the next day. As the investment product, which allows investors exposure to BTC continues trading, an increasing number of deep pockets continue to disclose ownership.
Also Read: Bitcoin price reclaims territory above $64K after April CPI release
Vanguard CEO Incumbent’s sentiments about spot BTC ETF don’t look positive
Firms and institutions have progressively disclosed ownership of BTC ETF. Ordinarily, the fact that high-networth institutions want in on the action would be reason enough for investment bigwigs to venture into the business, but The Vanguard Group will not budge.
In a recent appearance, the new CEO of Vanguard, Salim Ramji, has shot down the possibility of launching spot BTC ETFs, saying he will not reverse the firm’s decision not to launch a Bitcoin ETF.
Incoming Vanguard CEO Salim Ramji already shooting down any possibility of firm launching spot bitcoin ETF...
— Nate Geraci (@NateGeraci) May 15, 2024
He didn't specifically comment on whether Vanguard would allow spot bitcoin ETFs on its brokerage platform, but this doesn't look positive.
via @AndrewWelsch pic.twitter.com/ILn4nvVwNN
Ramji’s statement is a direct extract from an excerpt from the January 24 blog on Vanguard’s website, which reads, “Vanguard does not have plans to create a Vanguard bitcoin ETF or other crypto-related products. Additionally, such products from other issuers will not be offered on our brokerage platform.”
Ramji is set to take office in July and commits to abiding by the firm’s stance. His ascension would mark a paradigm shift, given his history heading BlackRock's global ETF business. In fact, he spearheaded BlackRock’s IBIT filing and logistics. His interest in digital assets is also not a secret.
Vanguard’s reasons for not offering crypto-related products
As a firm and a brokerage platform, Vanguard is purposely structured to meet the needs of its investor owners, most of whom are long-term, buy-and-hold investors.
Vanguard sees crypto as more of a speculation than an investment, saying, “It’s an immature asset class that has little history, no inherent economic value, no cash flow, and can create havoc within a portfolio.”
Vanguard’s products and services are designed with the goal to help investors save more, trade less, and take a long-term approach—not chase trends and churn their portfolios. Crypto is highly volatile, making it more tempting to trade.
However, Bloomberg Intelligence ETF analyst Eric Balchunas says that with Ramji’s entry as CEO, “[The] door [is] much more open now.”
It becomes even more enticing considering the stream of institutions that continue to disclose ownership. Among them:
- Wells Fargo now holds Grayscale's spot Bitcoin ETF, joining the trend of institutional adoption.
- Susquehanna International Group holds $1.8 billion in Bitcoin ETFs
- State of Wisconsin Investment Board (SWIB) invested $162 million in Bitcoin ETFs, making it the first state institution to go public with spot BTC ETF holdings.
- JPMorgan, the largest bank in the US, has disclosed holdings in spot Bitcoin ETFs, per SEC filing.
- Millennium Management discloses $2 billion spot Bitcoin ETF portfolio.
By venturing into this space or allowing other crypto-related products, Vanguard would embrace Bitcoin ETFs while allowing investment managers to tap into the growing cryptocurrency market without directly holding cryptocurrencies, which can be complex and risky.
Crypto ETF FAQs
An Exchange-Traded Fund (ETF) is an investment vehicle or an index that tracks the price of an underlying asset. ETFs can not only track a single asset, but a group of assets and sectors. For example, a Bitcoin ETF tracks Bitcoin’s price. ETF is a tool used by investors to gain exposure to a certain asset.
Yes. The first Bitcoin futures ETF in the US was approved by the US Securities & Exchange Commission in October 2021. A total of seven Bitcoin futures ETFs have been approved, with more than 20 still waiting for the regulator’s permission. The SEC says that the cryptocurrency industry is new and subject to manipulation, which is why it has been delaying crypto-related futures ETFs for the last few years.
Bitcoin spot ETF has been approved outside the US, but the SEC is yet to approve one in the country. After BlackRock filed for a Bitcoin spot ETF on June 15, the interest surrounding crypto ETFs has been renewed. Grayscale – whose application for a Bitcoin spot ETF was initially rejected by the SEC – got a victory in court, forcing the US regulator to review its proposal again. The SEC’s loss in this lawsuit has fueled hopes that a Bitcoin spot ETF might be approved by the end of the year.
Author
Lockridge Okoth
FXStreet
Lockridge is a believer in the transformative power of crypto and the blockchain industry.
