Vanguard Users Threaten To Close Accounts After Ignoring Bitcoin ETFs
Asset manager Vanguard's refusal to allow bitcoin exchange-traded fund (ETF) positions on its platform appears to have pushed a few clients to the exits.
According to a Jan. 11 report from the Wall Street Journal, Vanguard said it will not offer its new position on the brokerage platform because Bitcoin ETFs do not align with its traditional offerings.
“Spot bitcoin ETFs are not available for purchase on the Vanguard platform,” the company said in a statement to the WSJ, “nor do we plan to offer Vanguard bitcoin ETFs or other crypto-related products.”
“Our view is that these products are inconsistent with our offerings focused on asset classes such as stocks, bonds and cash, which Vanguard views as the building blocks of a well-rounded, long-term investment portfolio.”
Vanguard was not among the 14 issuers to apply for a spot bitcoin ETF last year, and some investors saw the recent moves as a reason to move their money to other platforms.
A spokesman for one outspoken Vanguard client, Tony Spencer, said Vanguard does not allow people to buy bitcoin ETFs because the product “doesn't fit Vanguard's investment philosophy.”
Spencer also said Vanguard will soon allow investors to sell Greyscale's flagship Bitcoin product, GBTC, into a spot-only ETF.
NEW: @Vanguard_Group, the world's second-largest asset manager behind @BlackRock , is preventing clients from buying its new $BTC Spot ETFs, reportedly saying the products are “not consistent with Vanguard's investment philosophy.”
Now we begin to see how institutional… https://t.co/LmZodeYyad.
— Eleanor Terrett (@EleanorTerrett) January 11, 2024
Yuga Koehler, senior engineering manager at Coinbase, was among those who said he would switch his Roth 401(k) savings to Fidelity at Vanguard, which launched one of the 10 bitcoin ETFs launched on January 11.
“Vanguard's paternalistic ban on Bitcoin ETFs does not fit with my investment philosophy,” Kohler added.
Bitcoin analyst Neil Jacobs also said he is in the process of transferring funds from Vanguard in response to the reported decision. “A terrible business decision by Vanguard,” he said.
Vanguard refuses to allow clients to buy #Bitcoin ETFs with their own money.
So customers are closing their accounts‼️ pic.twitter.com/11o1tOHR9S
— Bitcoin Archive (@BTC_Archive) January 11, 2024
Clients from Citi, Merrill Lynch, Edward Jones and UBS said they were unable to buy Bitcoin ETFs on their respective platforms, the WSJ reported. Cointelegraph reached out to the companies for comment and did not receive an immediate response.
However, Merrill Lynch is waiting to see if the space trades Bitcoin ETFs effectively before deciding to buy bitcoin products, according to Fox Business reporter Eleanor Terrett.
Meanwhile, spot Bitcoin ETF trading was accessible on JPMorgan's brokerage platform. JPMorgan is an authorized participant of the BlackRock IBIT product. However, the Jamie Dimon-led bank has shared concerns about placing trade orders with prominent investors, according to screenshots shared by Dan McArdle, co-founder of the blockchain intelligence platform.
Bitcoin ETFs are like rap albums in the late 80s. Vanguard doesn't even carry them and here's JPM's parent advisory account slapping on $IBIT https://t.co/Pe7MY9az86
— Eric Balchunas (@EricBalchunas) January 11, 2024
Related: Spot Bitcoin ETFs Record Significant Volume on Day 1 — BTC Price Closes to $49K
The first day of trading came on January 10 after the long-awaited regulatory approval.
Spot Bitcoin ETF trading volume increased by 4.5 billion in the first day of trading, with most of the flow coming from BlackRock's IBIT, Grayscale's GBTC and Fidelity's FBTC products.
The US Securities and Exchange Commission has approved the 19b-4 and S-1 filings of ARK 21Shares, Invesco Galaxy, VanEck, WisdomTree, Valkyrie, Bitwise and Franklin Templeton. Hashdex has not yet received an S-1 license.
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