Key Takeaways
- Vanguard is considering adding crypto ETFs to its suite of investment products.
- The success of Bitcoin and Ethereum ETFs could be a factor that influenced such a narrative.
- The latest statement comes amid various crypto ETF decision deadlines as the SEC continues reviewing applications.
Vanguard Group Inc. is also considering allowing its clients to trade crypto-based exchange-traded funds (ETFs) on its brokerage platform, as reported by a source familiar with the issue. The discussion can be characterized as the possible breaking of the traditionally conservative approach of the firm to digital assets. This comes amid major crypto ETF deadlines as the U.S. Securities and Exchange Commission (SEC) moves to offer a verdict on varied filings.
Vanguard May Allow Crypto ETF Trading
Should the investment giant proceed, it would enable its over 50 million customers who jointly manage nearly $11 trillion to tap into Bitcoin and Ethereum ETFs that are available with other providers. Currently, Vanguard does not have any cryptocurrency products of its own, and its brokerage platform prohibits investors from trading spot Bitcoin and Ethereum ETFs managed by competitors.
A company spokesperson stated, “We continuously evaluate our brokerage offer, investor preferences, and the evolving regulatory environment. If and when a decision is made, clients will hear directly from Vanguard.
Vanguard has been one of the few firms over the years to express skepticism against crypto. Strategists at firms in the past cautioned that the incorporation of digital currencies would lead to “havoc” in the portfolios because the industry was still “immature.” The late founder of Vanguard, Jack Bogle, once advised investors not to invest in Bitcoin “like the plague,” and former Chief Executive Officer Tim Buckley wrote that the firm would never sponsor a Bitcoin fund.
The management of the firm has, however, changed. The first outsider to lead the Pennsylvania-based asset manager was Salim Ramji, who joined BlackRock Inc. as a CEO last year. His arrival was regarded by industry observers as a milestone. In contrast to his predecessor, Ramji has developed a receptiveness to blockchain and digital asset innovation.
It is set against the background of a thriving crypto-linked funds market. Spot Bitcoin ETFs, which launched in January 2024, attracted record inflows. Thereafter, Ethereum ETFs followed when regulators gave the first products based on the second-largest token the green light.
Now, the SEC is reviewing altcoin ETF applications involving XRP, Solana (SOL), Hedera (HBAR), Dogecoin (DOGE), and Litecoin (LTC). Most deadlines are in October, starting with the Canary Capital Litecoin ETF decision due on October 2.
Success of Bitcoin and Ethereum ETFs
Together, Bitcoin ETFs have over $142 billion in assets, and the iShares Bitcoin Trust (IBIT) at BlackRock is nearly $84 billion on its own. About $24 billion has moved to IBIT this year, making it one of the five most popular ETFs in the United States of all asset types.
BlackRock has also gone miles in terms of Ethereum exposure. Strong institutional demand is evidenced by its fund, ETHA, which has gathered approximately $15 billion. In the meantime, the Trump administration has advanced policies that are conducive to the adoption of digital assets, which have increased interest in the industry.
According to Bloomberg Intelligence senior ETF analyst Eric Balchunas’ previous statement, the radical adoption has raised the chances of Vanguard rethinking its limitations. At the time, he noted, “The astounding success of the ETFs added a lot to the pressure. Had Bitcoin ETFs been a flop, I don’t think they would consider lifting the ban.”
Read More: SEC Asks XRP, SOL, LTC, DOGE Issues to Withdraw 19b-4 Filings, What’s the Reason?
