This policy reversal permits Vanguard brokerage customers, starting Tuesday, to engage in the trading of ETFs and mutual funds that predominantly invest in select cryptocurrencies, including Bitcoin.
This strategic decision reflects a notable evolution for Vanguard, which has historically contended that digital assets are too volatile and speculative for long-term investment portfolios.
The move comes in response to increasing demand from both retail and institutional investors and follows the January 2024 approval of spot Bitcoin ETFs, which brought billions of dollars into regulated cryptocurrency products.
BlackRock’s iShares Bitcoin Trust, the largest fund of its kind, reached a peak of nearly $100 billion in assets earlier this fall and currently manages approximately $70 billion, despite fluctuations in market prices.
Andrew Kadjeski, Vanguard’s head of brokerage and investments, commented to Bloomberg that “cryptocurrency ETFs and mutual funds have been tested through periods of market volatility, performing as designed while maintaining liquidity.” He noted that the operational processes for managing crypto funds have matured alongside evolving investor preferences.
This policy update follows more than a year after Salim Ramji, previously a senior executive at BlackRock and a proponent of blockchain technology, became the CEO of Vanguard.
While Vanguard intends to support a range of crypto funds that comply with regulatory standards, the firm has clarified that it will not introduce its own cryptocurrency products and will continue to exclude funds associated with meme coins.
“While Vanguard has no plans to launch its own crypto products, we serve millions of investors with diverse needs,” Kadjeski stated.
Crypto-linked ETFs are among the most rapidly growing segments in the U.S. fund industry, even in the wake of a significant market pullback, highlighting the increasing appetite among investors for regulated exposure to digital assets.
Moreover, BlackRock has enhanced its internal investment in its IBIT spot Bitcoin ETF, with its Strategic Income Opportunities Portfolio now holding 2.39 million shares valued at $155.8 million, an increase of 14% since June.
Following this announcement, Bitcoin’s price experienced an uptick, trading above $86,500 at the time of this writing.
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