Trending
In the cryptocurrency universe, there’s rarely a dull moment, but not all of the action is confined to the price gyrations of various digital assets. This week proves as much.
On Monday, Vanguard finally relented, announcing it will advisors and investors to access “select” cryptocurrency exchange traded funds (ETFs) on its trading platform. The news arrived nearly two years after the first spot bitcoin ETFs came to market in the U.S. Said another way, one of the world’s largest asset managers with more than 50 million brokerage customers as of the end of 2024 went nearly two years without allowing those clients to purchase digital currency ETFs on its platform.
The news arrives about two months after speculation surfaced that Pennsylvania-based Vanguard could reverse its stance on crypto ETF access. Reversing course appears to be exactly what Vanguard is doing because it’s going from no crypto ETF access to opening nearly entire universe of such products to its clients. Translation: Vanguard customers will be able to buy and sell much more than just spot bitcoin ETFs with the broker, a credit to the asset manager’s quasi-liberalization of its digital currency ETF views.
Why It’s Important
News that Vanguard will permit cryptocurrency ETF access isn’t solely important because the firm’s size and brand recognition.
It’s not surprising that Vanguard has dragged its heels on digital currency ETF access. After all, it didn’t introduce a junk bond ETF until earlier this year. The asset manager can also argue that its core customer -- median age for their financial advice service clients was 64 – probably isn’t interested in cryptocurrency nor should they be.
In the crypto ETF access conversation, it’s not baby boomers Vanguard needs to worry about. It’s Gen Z and millennials – many of whom are likely to fire their parents’ advisors when their folks pass on. Lack of access to specific asset classes is a valid reason to search for another advisor.
In simple terms, Vanguard bringing crypto ETFs to its platform is one way through which the asset manager can better connect with up-and-coming generations. Many younger investors already love low-cost Vanguard ETFs, but the thing is they hold those funds at places like Robinhood and unless Vanguard takes steps to freshen its image, it risks losing business from millennials and Gen Z.
What’s Not Changing at Vanguard
While there’s some crypto-related change afoot at Vanguard, advisors and investors shouldn’t expect wholesale change coming in the form of a Vanguard bitcoin ETF or a similar product. It’s not happening anytime soon.
“When it comes to investment products we create, our posture has not changed; we focus on products that generate cash flow in a transparent way, such as interest payments and dividends. At this time, Vanguard has no plans to launch our own cryptocurrency ETFs or mutual funds,” according to the company.
That posture isn’t surprising because Vanguard has been consistent in its stance that it won’t bring its own digital asset fund to market – a similar approach to what it’s taken with other popular asset classes.
“Our brokerage platform is designed to provide access to a broad range of investment options – including most third-party cryptocurrency ETFs and mutual funds that meet regulatory standards. This approach is consistent with our long-standing policy: for example, gold funds are available on our brokerage platform, but we have never offered a gold ETF,” concludes the firm.