Industry Updates

Vanguard CEO doubles-down on anti-bitcoin ETF stance

‘It is a speculative asset’

Theo Andrew

Tim Buckley

Vanguard CEO Tim Buckley has doubled down on the firm’s anti-bitcoin ETF stance.

In a recent webinar, Buckley said the world’s largest asset manager was unlikely to change its mind on bitcoin “unless the asset class changes”.

Responding to a webinar question on what it would take for it to launch a bitcoin ETF, Buckley (pictured) said: “We do not plan to, and we are not going to change our minds around this unless the asset class changes.

“For why, first of all, we do not believe a bitcoin ETF belongs in a long-term portfolio of someone saving for their retirement. It is a speculative asset.”

Vanguard’s stance leaves it as somewhat of an outlier in the crypto space, with the likes of BlackRock, Fidelity Investments and Invesco all launching physical bitcoin ETFs in the US since their approval on 10 January.

Buckley added: “Something like bitcoin is just too volatile and it is not a store of value.

“When stocks got hammered in the recent crisis, bitcoin went right with them. It is speculative. It is tough to think about how it belongs in a long-term portfolio.”

He said it does not act like equities – which offer goods and services and pay dividends – or offer the income stream of bonds.

On 1 March, Blackrock's physical bitcoin ETF hit $10bn assets under management (AUM), the fastest ETF to ever hit the milestone.

Less than three weeks later, the iShares Bitcoin Trust ETF now houses $15.9bn AUM.

Investors in the US are also unable to get access to bitcoin ETFs via Vanguard’s brokerage platform.

The passive giant has a history of excluding certain types of investments that are not “consistent with our philosophy and past practice”.

This includes the “internet funds of the late 1990s”, according to Vanguard.

It also banned access to leveraged and inverse funds and ETFs on its platform in 2019, as well as most over-the-counter stocks.

Vanguard founder Jack Bogle famously turned down the offer to launch the first ETF, viewing the wrapper as a trading vehicle and staunchly against the firm’s buy-and-hold philosophy.

Eight years after the launch of the first-ever ETF, the SPDR S&P 500 ETF Trust (SPY), Vanguard launched its first ETF in 2001.

The Vanguard Total Stock Market ETF (VTI) was unveiled as a share class of its global equity mutual fund, in a previously patented process.

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