Vanguard Labels Bitcoin as an ‘Immature Asset Class’

Vanguard has opted not to offer clients access to a bitcoin ETF, citing the cryptocurrency as an “immature asset class” that does not align with the company’s philosophy.

Here’s full explanation from Vanguard on not allowing spot bitcoin ETFs on platform…

“It’s an immature asset class that has little history, no inherent economic value, no cash flow, and can create havoc within a portfolio.”https://t.co/Nip8UWPHvR pic.twitter.com/mcWDeQDRuU

— Nate Geraci (@NateGeraci) January 27, 2024

The investment giant’s stance on digital assets was clarified by Janelle Jackson, head of ETF markets and brokerage. She noted that Vanguard also has no plans to launch its own cryptocurrency-based products, given the current state of the industry.

“While cryptocurrencies are classified as a commodity, it is an immature asset class that lacks a deep history, intrinsic economic value, cash flow, and can create chaos in a portfolio,” she said.

Jackson emphasized that Vanguard has a rigorous decision-making process for introducing new products, with primary focus on their long-term investment benefits and client needs.

Despite the growing discussions around bitcoin and cryptocurrencies, Vanguard does not consider them suitable for inclusion in portfolios, she added.

Earlier in January, the SEC approved applications for the launch of spot bitcoin ETFs from 11 issuers, including BlackRock and Fidelity.

Following the commencement of trading these products, the price of the leading cryptocurrency surpassed $48,000. However, within two days, the quotes fell below $43,000, and subsequently, $40,000.