Vanguard says Bitcoin is “immature asset class”

cyptouser6 months agoCryptocurrencies News94

Vanguard decided not to offer clients access to Bitcoin ETFs because the flagship cryptocurrency is an “immature asset class” that does not align with its company philosophy, according to the firm’s executives.

Vanguard Global Head of ETF Capital Markets and Broker and Index Relations Janel Jackson made the statement during a QA session, where she clarified the investment firm’s stance on Bitcoin and digital assets. 

According to Jackson:

“While crypto has been classified as a commodity, it’s an immature asset class that has little history, no inherent economic value, no cash flow, and can create havoc within a portfolio.”

No plans for Bitcoin ETF

Jackson said that Vanguard would not launch a Bitcoin ETF or any crypto-related products, considering the current state of cryptocurrencies as an asset class.

She highlighted that the decision-making process for introducing new investment products at Vanguard is rigorous and prioritizes long-term investment merit and client needs. Despite the growing discourse around Bitcoin and cryptocurrencies, Vanguard does not view them as suitable for inclusion in long-term investment portfolios.

Meanwhile, the company’s Head of Brokerage & Investments, Andrew Kadjeski, emphasized that Vanguard’s investor base primarily consists of long-term, buy-and-hold investors, and the firm’s offerings reflect these clients’ interests. 

He added that despite the ease of allowing full access to crypto products, such a move would not align with Vanguard’s mission to serve the best long-term interests of its investor-owners.

Both Jackson and Kadjeski reflected on Vanguard’s history of forgoing short-term trends for long-term stability. Vanguard had steered clear of internet funds in the 1990s and more recently removed access to leveraged and inverse funds and ETFs in 2019 and over-the-counter stocks in 2022 due to their high risk and potential for misuse.

Backlash

Vanguard’s stance toward Bitcoin ETFs has sparked significant reactions in the investment community. The firm’s stance, focused on traditional asset classes like equities, bonds, and cash, has led to frustration among some of its clients, particularly those who advocate for including cryptocurrencies in investment portfolios. 

Industry experts have suggested that Vanguard might lose credibility and assets due to its stance on Bitcoin ETFs, as it appears to be a move contrary to the current market trend where many investors are seeking exposure to digital assets.

Notably, other major players in the asset management space, like BlackRock, have embraced Bitcoin ETFs, highlighting a divergence in strategies within the industry.

Despite Vanguard’s resistance to Bitcoin ETFs, some analysts believe the company might eventually soften its stance. The growing popularity of digital assets and pressure from competitors could be influential factors in such a potential shift.

However, Vanguard remains committed to its traditional investment approach, focusing on asset classes that it considers foundational for long-term investment success.

Author

Assad Jafri

Reporter at CyptoRanking

AJ, a passionate journalist since Yemen's 2011 Arab Spring, has honed his skills worldwide for over a decade. Specializing in financial journalism, he now focuses on crypto reporting.

@Saajthebard LinkedIn Email Assad Editor

News Desk

Editor at CyptoRanking

CyptoRanking is a comprehensive and contextualized source for crypto news, insights, and data. Focusing on Bitcoin, macro, DeFi and AI.

@cryptoslate LinkedIn Email Editor Latest Report

The invisible engine: How OTC trading powers Bitcoin ETFs

Exploring the intricacies of OTC trading, providing a comprehensive understanding of this often overlooked but vital component of the market.

Andjela Radmilac · 22 hours ago
The content on this website comes from the Internet. Due to the inconvenience of proofreading the authenticity and accuracy of the copyright or content of some content, it may be temporarily impossible to confirm the authenticity and accuracy of the copyright or content. For copyright issues or other issues caused by this, please Call or email this site. It will be deleted or changed immediately after verification.

related articles

Paraguay to reconsider Bitcoin mining ban, mulls selling energy to miners

Paraguay to reconsider Bitcoin mining ban, mulls selling energy to miners

1205f261˃Paraguayan senators have halted progress on the proposed cryptocurrency mining ban introduc...

Bitcoin network transaction fees temporarily soar to nearly $52

Bitcoin network transaction fees temporarily soar to nearly $52

55966e89˃The Bitcoin network is currently experiencing a sharp increase in network fees driven by 33...

Ripple partners with National Bank of Georgia to digitize economy

Ripple partners with National Bank of Georgia to digitize economy

55966e89˃Major cryptocurrency firm Ripple is deepening ties with the Republic of Georgia by explorin...

Major East Asian investors launch a $100 million Web3 fund in Dubai

South Korean gaming giant Wemade (WEMIX) teamed up with Whampoa Digital, the technology investment a...

Worldcoin's identity service captures over 1% of Argentina amidst token value surge

Worldcoin verified nearly 16,000 Argentines in a single day in late December, bringing the number of...

Polkadot developer proposes inflation upgrade to enhance transparency

Polkadot developer Kian Paimani has proposed a flexible inflation upgrade for the network to address...