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For Vanguard, crypto assets like Bitcoin and Ethereum are “more of a speculation than an investment,” and chasing speculative assets will never be the fund’s investment philosophy. No doubt Vanguard constantly says no to Bitcoin exchange-traded funds (ETFs). There is no exception for Ethereum ETFs.
Earlier this month, Vanguard reportedly appointed ex-BlackRock ETF head Salim Ramji as its next CEO. The transition, slated for July, sparked speculation that the fund might be close to revising its stance on crypto-related investment products.
However, Ramji made it clear that the fund would not file for a Bitcoin ETF and refused to offer any Bitcoin ETF on its brokerage platform.
The firm’s view was reiterated after the SEC’s approval of spot Ethereum ETFs in the US. On Wednesday, Vanguard confirmed to the public that no spot Ethereum fund would be available for purchase.
Commenting on Vanguard’s recent statement, Bloomberg ETF analyst Eric Balchunas said Vanguard’s stance could be frustrating, but it would be better to accept it and “move on” because it is not a typical asset manager who seeks to maximize revenue.
“They [are] more like a co-op, and they’ve taken in nearly billion a day for over a decade, and so they [are not] envious of other people’s hit ETFs,” Balchunas stated.
The expert added that Vanguard could be overprotective when it comes to restricting investors from buying crypto ETFs.
“It seems like they [are] playing Nanny role. Their investors are the smartest money on the planet IMO, they are not easily misled children, they can handle having choices,” Balchunas wrote.
Will history be on Vanguard’s side?
Organizations each have their own implicit and explicit values and norms. For Vanguard, its products need to meet investors’ long-term needs. The fund prioritizes investor protection even if it means sacrificing short-term gains.
Looking back, avoiding trendy investments was Vanguard’s right decision. In the past, the fund refused to chase “hot” options like government-plus funds, tactical-allocation funds, or internet funds, which all crashed and burned.
Its commitment to a sound investment philosophy pays off in nearly all cases. If it still contributes to the firm’s success, an abrupt shift may not be necessary.
It remains unknown if Vanguard will change its judgment on Bitcoin in the future. Bitcoin may need to prove itself as a true store of value, like gold, to get a place in the fund’s portfolio.
Perhaps there’s a glimmer of hope there.
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