Vanguard CEO Warns Against Bitcoin ETFs Citing Asset’s Speculative Nature

Tim Buckley, CEO of investment giant Vanguard, remains opposed to spot exchange-traded funds (ETFs) based on the leading cryptocurrency due to the asset’s volatile nature. He expressed this view in a video address to clients.

Buckley cautioned against including Bitcoin ETFs in retirement investment portfolios, labeling the coin as “speculative.”

In his view, digital gold as a savings vehicle is questionable:

“When the stock market suffered during the crisis, Bitcoin went along with it. Therefore, it is speculative. It’s really hard to think about how it can be included in a long-term portfolio.”

Despite Vanguard clients’ desire to trade Bitcoin ETFs, Buckley remains unwilling to add the instrument unless “the asset class itself changes.”

In January, he described the crypto market as “immature” and not aligned with the company’s philosophy.

Following the approval of 11 spot Bitcoin ETFs, Vanguard adopted a negative stance towards crypto funds. The company did not allow clients to purchase these products despite numerous requests.

?NEW: @Vanguard_Group, the world’s second largest asset manager behind @BlackRock, is reportedly blocking its customers from buying into the new $BTC Spot ETFs, saying the products “don’t fit with Vanguard’s investment philosophy.”

Now we’ll start to see how institutional… https://t.co/LmZodeYyad

— Eleanor Terrett (@EleanorTerrett) January 11, 2024

Senior technical manager at Coinbase, Yuga Cohler, announced he would transfer his $401,000 savings to Fidelity.

I have 8 years worth of 401K savings at @Vanguard_Group from my time as an employee at Google.

I will be rolling over these funds to @Fidelity.

Vanguard’s paternalistic blocking of Bitcoin ETFs does not fit in with my investment philosophy. https://t.co/eKmgo0xK5h

— yuga.eth ? (@yugacohler) January 11, 2024

“Vanguard’s paternalistic blocking of Bitcoin ETFs does not fit in with my investment philosophy,” Cohler added.

Bitcoin enthusiast Neil Jacobs announced the closure of his account with the management company, calling the firm’s policy a “terrible business decision.” The mass exodus of clients was also noted by Bitcoin Archive.

Vanguard refuses to let customers buy #Bitcoin ETFs with their own money.

So customers are closing their accounts‼️ pic.twitter.com/11o1tOHR9S

— Bitcoin Archive (@BTC_Archive) January 11, 2024

Meanwhile, Vanguard is somewhat reliant on Bitcoin, as it is the second-largest institutional holder of MicroStrategy shares, worth over $2 billion.

On March 12, net inflows into spot exchange-traded funds based on the leading cryptocurrency reached a record $1.05 billion.

Bloomberg analyst Eric Balchunas stated that the addition of Bitcoin ETFs by major platforms and the approval of options based on them will become “powerful catalysts” for demand by the end of the year.

MicroStrategy founder Michael Saylor noted the rapid adoption of digital gold among institutions thanks to exchange-traded funds.