Is Vanguard Coming Around to Crypto ETFs?

Changing your mind is hard, but it’s a sign of maturity and openness to new information… Especially, when there’s money to be made.

Vanguard appears to be reevaluating its stance on crypto ETFs, which the financial giant famously has not allowed on its brokerage. That’s according to industry newsletter Crypto in America, which cited an anonymous source familiar with the company’s plans. The potential change follows demands from clients for access to crypto ETFs and developments at the US Securities and Exchange Commission, which has dramatically changed its stance on crypto, the publication noted. 

Vanguard indicated an openness to adding products in a statement to ETF Upside, a significant change in posture, but neither confirmed nor denied the report. “Today, cryptocurrency mutual funds and ETFs are generally not available for purchase on the Vanguard brokerage platform, but we continuously evaluate our brokerage offer, investor preferences and the evolving regulatory environment,” a spokesperson said. “If and when a decision is made, clients will hear directly from Vanguard.”

Close with Crypto

It’s notable that Vanguard CEO Salim Ramji came from BlackRock, where he oversaw the introduction of numerous iShares ETFs to the market, including the biggest crypto exchange-traded product on the planet, the now $84 billion iShares Bitcoin Trust ETF. While Ramji last year said that Vanguard did not have plans to pursue its own crypto ETFs, he was less dismissive of adding third-party products on the brokerage side, Crypto in America wrote. 

Vanguard has several potential routes to adding access to crypto, according to Jeff DeMaso, editor of the Independent Vanguard Adviser:

• It could allow most crypto ETFs on its platform.
• It could limit most or all of them, contending that, like leveraged ETFs, crypto “doesn’t have a role to play in investors’ portfolios.”
• It could greenlight select crypto ETFs, like spot Bitcoin, but avoid others it deems too speculative.

Fool’s Gold? It’s an easier argument for Vanguard to walk back its stance on excluding crypto ETFs from the brokerage than it would be for the firm to reconsider crypto products of its own, DeMaso said. And part of that is the company’s view on crypto, such as whether it buys into the idea that Bitcoin is digital gold. “If it’s gold 2.0, well, Vanguard lets you buy gold ETFs (like GLD), so why not allow bitcoin ETFs?”