Despite SEC approval, Vanguard reaffirms its position on Spot Ethereum ETFs

TLDR

Vanguard has confirmed that it does not offer Ethereum ETFs, even though the SEC has approved such products. The company maintains that cryptocurrency products do not align with the focus on traditional asset classes such as stocks, bonds and cash for long-term investment portfolios. Bloomberg ETF analyst Eric Balchunas described Vanguard's decision as “stupid” and pointed out that the company is playing a “guardian role” for its investors. Vanguard's incoming CEO Salim Ramji has experience in crypto-related products, but the firm remains committed to existing product offerings.

Vanguard Group, one of the leading investment advisors in the United States, recently confirmed its position to offer Ethereum exchange-traded funds (ETFs) on the platform.

This decision has drawn criticism from some industry experts despite the US Securities and Exchange Commission's (SEC) approval for such products.

Vanguard, which manages nearly $7.7 trillion in assets, has consistently emphasized its commitment to traditional asset classes such as stocks, bonds and cash.

The firm believes these are the foundation of a long-term investment portfolio. In a statement released by Vanguard's spokesperson,

“SpotEther ETFs will no longer be available for purchase on the Vanguard platform while we continue to review our brokerage offerings and evaluate new product launches.”

That stance drew backlash from industry experts like Bloomberg Senior ETF Analyst Eric Balchunas.

In an article on X, Balchunas called Vanguard's decision “stupid” and suggested the company was playing a “nanny role” to its investors.

Vanguard investors argue that they are the “smartest money on the planet” and can make informed decisions about their investments.

I know this CT is crazy, but I would just take the L here and continue, Vanguard is not a regular asset manager (saving constant income). They love mutual cooperation, and for more than ten years they have taken about a billion a day, and therefore they do not envy being beaten by other people…

— Eric Balchunas (@EricBalchunas) May 30, 2024

Despite the criticism, Vanguard's stance reflects its strategic choice to avoid the volatility and regulatory uncertainty associated with cryptocurrencies.

While some of its competitors, such as Fidelity and Charles Schwab, have embraced cryptocurrency products and allowed clients to trade bitcoin ETFs, Vanguard is cautious.

The appointment of Salim Ramji as Vanguard's new CEO, set to take effect in July, has sparked speculation about the company's future direction.

A former BlackRock executive, Ramji was instrumental in launching BlackRock's Bitcoin ETF (IBIT) and is believed to have contributed to the company's ETHA Ethereum ETF.

However, despite his background and apparent interest in crypto, Ramji is determined to maintain Vanguard's existing product offerings;

“Consistency in products and services is a priority.”