TL;DR
- Vanguard’s Stance: Vanguard, managing $7.7 trillion in assets, has decided not to offer spot Bitcoin ETFs, citing cryptocurrencies’ lack of intrinsic value and high volatility as reasons for their decision.
- Market Reaction: The decision has sparked both criticism and support, with some praising Vanguard’s conservative, long-term approach to investment.
- Founder’s Legacy: Vanguard’s decision aligns with the philosophy of its late founder, John Bogle, who had advised investors to “avoid Bitcoin like the plague”. Despite the controversy, Vanguard remains committed to its long-term investment philosophy.
Vanguard, the investment giant managing $7.7 trillion in assets, has firmly decided not to offer spot Bitcoin ETFs. This decision comes amidst a feverish demand for Bitcoin ETFs, with many investors and market enthusiasts eagerly jumping on the bandwagon.
Vanguard’s stance is based on its belief that cryptocurrencies lack intrinsic value and are too volatile for long-term investment strategies. The company has always been known for its conservative, long-term approach, and this decision is no exception. Vanguard has historically often avoided offering in-demand funds that “crashed and burned” for many peers.
The company’s decision has drawn sharp criticism from investors and sparked backlash on social media. However, it has also garnered support from some quarters. Morningstar’s vice president, of research, John Rekenthaler, has praised Vanguard’s decision, stating that it is a good sign for the fund giant and its clients.
Vanguard’s Founder Legacy: Avoid Bitcoin Like the Plague
Rekenthaler noted that Vanguard’s move is in line with its late founder’s philosophy. John Bogle, who passed away in early 2019, had recommended investors “avoid Bitcoin like the plague”. Some may contend that Bitcoin stands apart from previous offerings that Vanguard steered clear of, given that supporters view this cryptocurrency as a “digital gold” and a reservoir of wealth.
However, Rekenthaler counters this argument by stating that simply calling Bitcoin “digital gold” does not make it so. Despite the controversy, Vanguard remains steadfast in its decision. The firm has stated that offering crypto assets, including a spot bitcoin ETF, doesn’t align with its investing focus.
This decision is a testament to Vanguard’s commitment to its long-term investment philosophy and its willingness to stand its ground, even in the face of market demand.
Whether Vanguard’s decision will prove to be the right one remains to be seen. However, one thing is clear – Vanguard’s management knows when to say no, and that it remains willing to do so is a positive sign for the company’s financial health — and for those of its clients.
