Vanguard Shatters Tradition: Opens Floodgates to Crypto ETFs in Stunning Policy Reversal
Vanguard just ripped up its own rulebook. The $9 trillion asset management titan—long a crypto skeptic—is now granting clients access to Bitcoin and Ethereum spot ETFs. The move sends shockwaves through traditional finance, signaling a tectonic shift in institutional acceptance.
The Great Wall Cracks
For years, Vanguard stood as a fortress of traditional finance, famously blocking crypto-related products on its platform. CEO Tim Buckley once called Bitcoin 'more of a speculation than an investment.' That fortress wall now has a massive, ETF-shaped hole in it. The firm isn't launching its own funds but is allowing brokerage clients to trade existing spot ETFs from giants like BlackRock and Fidelity. It's a backdoor revolution—letting the crypto wave in without getting its own hands dirty.
Why the Sudden Pivot?
Follow the money. Billions have poured into spot Bitcoin ETFs since their January launch, creating an asset class too large and too lucrative to ignore. Vanguard faced mounting pressure from clients and advisors demanding access. The firm's previous stance wasn't just conservative; it was costing them assets under management as money flowed to competitors. This isn't a change of heart—it's a calculated business decision. When client dollars start walking out the door, even the staunchest principles find a way to evolve. Or, as they say in finance, morals are flexible at a certain fee threshold.
A New Era for Mainstream Crypto
This isn't just another firm dipping a toe in crypto waters. Vanguard serves millions of everyday investors, retirement accounts, and institutional clients. Its approval acts as a de facto stamp of legitimacy for the entire asset class. The move effectively normalizes crypto exposure within the most vanilla of investment portfolios. The gates aren't just open; the drawbridge is down, and the mainstream is marching in.
The irony is delicious: the firm that built its empire on low-cost, passive index investing is now facilitating access to what many still call a speculative gamble. But in today's market, the only real tradition is chasing returns—everything else is just branding. Vanguard's reversal proves that in finance, there are no permanent convictions, only permanent interests.
Several crypto firms shift their focus towards ETF trading
Vanguard’s recent decision to allow trading of ETFs and mutual funds demonstrates a significant shift for a firm that once expressed its belief that digital assets were highly volatile and posed substantial risks to major investment portfolios. Notably, this shift in stance was adopted despite the cryptocurrency market experiencing a loss of more than $1 trillion in value since early October.
This MOVE drew the attention of reporters, who reached out to the asset manager in an attempt to uncover the main motivators behind this decision. Responding to a request for comment, Vanguard mentioned that the surging demand from both individual and institutional investors led them to embrace the move.
To support this claim, analysts weighed in on Vanguard’s comment, noting that since the introduction of spot Bitcoin ETFs in January 2024, these ETFs have managed to capture billions in investments.
On the other hand, reports from reliable sources indicate that the asset manager’s decision aligns with the current industry trend. This finding was drawn after it was discovered that its competitors are now allowing the trade of ETFs on their platforms.
An example is BlackRock, Vanguard’s main rival. BlackRock was reported to still hold about $70 billion in its IBIT ETF despite some withdrawal cases and a decline in the price of BTC. However, this number reflects a decline from approximately $100 billion held just two months ago.
Meanwhile, sources acknowledged that Vanguard’s new approach makes regulated crypto investments available to over 50 million brokerage clients, who collectively manage more than $11 trillion in assets.
It is worth noting that crypto-linked ETFs are considered one of the quickly expanding fields in the history of US funds. Crypto analysts also highlighted that cryptocurrency supporters may view Vanguard’s decision as an indication that traditional finance cannot ignore the influence of digital assets.
As the topic of discussion sparked heated debates among individuals, Andrew Kadjeski, who leads brokerage and investments at Vanguard, decided to weigh in on the situation. Kadjeski stated that a test was conducted on cryptocurrency ETFs and mutual funds during market fluctuations. According to him, the results showed that they function as intended, while investors found it easy to purchase or sell them.
“The way we manage these funds has improved over time, and what investors want keeps changing,” Kadjeski added.
Vanguard vows to support most crypto ETFs and mutual funds
Vanguard has shifted its focus towards mutual funds and ETFs trading over a year after Salim Ramji assumed the role of the asset manager’s CEO. Notably, Ramji is a former executive at BlackRock and a strong supporter of blockchain technology.
Following his pro-crypto stance, Vanguard recently made public its intention to back most crypto ETFs and mutual funds that strictly adhere to regulatory rules set. This strategy will take place similarly to how the company manages other asset types, such as gold.
However, reports noted that Vanguard has no plans to introduce its own digital assets in the NEAR future. Additionally, it will still exclude funds connected to memecoins, as defined by the US Securities and Exchange Commission.
“Even though Vanguard doesn’t plan to create its own crypto products, we serve millions of investors with different needs and risk levels. We aim to offer a trading platform that allows our clients to invest in the products they choose,” Kadjeski added.
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