The first cryptocurrency should be viewed more as a speculative collectible rather than a functioning asset, according to John Ameriks from Vanguard’s quantitative investments department, as reported by Bloomberg.
He noted that Bitcoin lacks the attributes that provide income, compound interest, and cash flow, which are the qualities the company focuses on for long-term investments.
According to Ameriks, there is no compelling evidence that the underlying technology of cryptocurrency provides sustainable economic value.
“Therefore, I find it difficult to see Bitcoin as anything more than a digital equivalent of Labubu,” he added, referring to the popular collectible plush toys.
Previously, the management of the ~$12 trillion asset management company has repeatedly pointed to the speculative nature of cryptocurrency and classified it as an “immature” asset class.
In early December, Vanguard opened access to trading ETFs and mutual funds based on digital assets for more than 50 million brokerage clients.
Ameriks explained this decision by noting that Bitcoin ETFs have demonstrated effectiveness since their launch in January 2024. During this time, Vanguard confirmed that the products “meet the stated characteristics and description.”
“We allow people to hold and buy these ETFs on our platform if they wish. But they do so at their own discretion. We do not intend to advise them on buying or selling or which cryptocurrency tokens to hold. At this stage, we simply do not plan to do so,” the manager emphasized.
Ameriks acknowledged that there are certain scenarios that could confirm Bitcoin’s non-speculative value. For example, the value of digital gold could significantly increase in times of high inflation or political instability.
“If we see a sustained price movement in such circumstances, then it would be reasonable to discuss some investment strategy and the potential role of the asset in a portfolio. But until that happens, we are talking about too short a history,” he added.
Back in the summer, analysts discovered that Vanguard invested over $9 billion in Strategy, which holds the largest corporate Bitcoin reserve.