Vanguard Group has rejected a Bitcoin ETF, citing the cryptocurrency’s lack of maturity and inconsistency with its investment philosophy.
Vanguard decided not to offer a Bitcoin ETF to clients because the flagship cryptocurrency is an “immature asset class” that doesn’t align with its corporate philosophy, according to company executives.
Janel Jackson, head of global ETF capital markets and broker and index relationships at Vanguard, made the statement during a QA session where she clarified the investment firm’s stance on Bitcoin and digital assets.
According to Jackson:
“While cryptocurrencies have been classified as commodities, they are an immature asset class with little history, no intrinsic economic value, no cash flows, and the potential to wreak havoc in an investment portfolio.”
No plans for a Bitcoin ETF
Jackson said Vanguard will not launch a Bitcoin ETF or any crypto-related products given the current status of cryptocurrencies as an asset class.
She stressed that Vanguard's decision-making process for launching new investment products is very rigorous and prioritizes long-term investment value and customer needs. Despite the increasing discussion around Bitcoin and cryptocurrencies, Vanguard does not believe they are suitable for inclusion in long-term investment portfolios.
Meanwhile, Andrew Kadjeski, the firm’s head of brokerage and investments, stressed that Vanguard Group’s investor base is primarily made up of long-term buy-and-hold investors, and the firm’s products reflect the interests of these clients.
He added that while it would be easy to allow full access to crypto products, such a move would not be consistent with Vanguard’s mission to serve the best long-term interests of its investor-owners.
Both Jackson and Kadjeski reflected on Vanguard’s history of forgoing short-term trends for long-term stability. Vanguard shunned dot-com funds in the 1990s and more recently eliminated access to leveraged, inverse funds and ETFs in 2019 and over-the-counter stocks in 2022 because of their high risk and potential for abuse.
Strong resistance
Vanguard’s stance on a Bitcoin ETF has drawn strong reactions from the investing community. The company’s focus on traditional asset classes like stocks, bonds and cash has led to frustration among some clients, especially those who advocate for including cryptocurrencies in their portfolios.
Industry experts say Vanguard could lose credibility and assets for its stance on a Bitcoin ETF, as the move appears to go against the current market trend where many investors are seeking exposure to digital assets.
Notably, other major players in the asset management space, such as BlackRock, have embraced a Bitcoin ETF, highlighting the divergence in strategies within the industry.
Despite Vanguard’s resistance to a Bitcoin ETF, some analysts believe the company may eventually soften its stance. The growing popularity of digital assets and pressure from competitors could be factors in this potential shift.
However, Vanguard remains committed to its traditional investing approach, focusing on asset classes it believes are critical to long-term investing success. #Vanguard #比特币ETF
