Vanguard’s new boss says Bitcoin ETF not on the table: Report

As a researcher with a background in the financial industry and a keen interest in cryptocurrencies, I find Vanguard’s decision not to launch a spot Bitcoin ETF intriguing. The new CEO, Salim Ramji, who was previously responsible for BlackRock’s global ETF business and oversaw the launch of its spot Bitcoin ETF, has stated that the investment philosophy of Vanguard does not align with crypto-related products.

The newly appointed CEO of Vanguard, the prominent US investment firm, has declared that they have no plans to change their stance on not creating a Bitcoin (BTC) spot Exchange-Traded Fund (ETF).

In a May 15 interview with Barron’s, Vanguard’s newly appointed CEO, Salim Ramji (previously the head of BlackRock’s global ETF business), expressed that Vanguard upholds consistency in its investment approach and crypto-related products do not fit within this philosophy.

“Ramji emphasized the significance of firms maintaining a clear and consistent identity in regards to their values, offerings, and brand.”

“I have heard [chief investment officer] Greg Davis’ explanation and I think it is entirely consistent with Vanguard’s investment philosophy. It is a logical and consistent point of view.”

Ramji played a key role in the debut of BlackRock’s Bitcoin spot ETF, the iShares Bitcoin Trust (IBIT), back in January. This fund has successfully attracted an impressive amount of investments, totalling approximately $18 billion in assets under its management.

Observers in the industry have been wondering what impact he might bring to Vanguard after he publicly declared his enthusiasm for cryptocurrencies.

At the same time as BlackRock introduced its ETF for Bitcoin, competitors such as Fidelity and nine other asset managers debuted their own spot Bitcoin funds. These funds have collectively attracted approximately $12 billion in investments.

As a crypto investor, I can tell you that despite having $8.6 trillion in assets under management (AUM), Vanguard chose not to follow the trend of launching a Bitcoin Exchange-Traded Fund (ETF). From my perspective, they viewed cryptocurrency as a high-risk investment with an uncertain future and an immature asset class that may not be suitable for their more conservative investors.

In a May 15 blog post, Bloomberg ETF analyst James Seyffart expressed his doubts that Ramji would bring about the launch of a Bitcoin ETF from Vanguard.

Seyffart noted that Ramji could potentially change the company’s stance and prohibit customers from purchasing other Bitcoin spot ETFs on their brokerage platform.

In March, Tim Buckley, who was about to step down as CEO of Vanguard, expressed his view that a Bitcoin Exchange-Traded Fund (ETF) isn’t suitable for a retirement savings portfolio due to its speculative nature.

I analyzed the situation from a customer perspective after the introduction of Bitcoin ETFs by competing companies. The mounting pressure from clients influenced my comments.

In January, several Vanguard customers considered shutting down their accounts due to the company’s decision to restrict access to Bitcoin spot Exchange-Traded Funds (ETFs).

At the same time, Vanguard held a significant investment in MicroStrategy as its second largest institutional owner, thereby gaining exposure to Bitcoin through this company.

As a financial analyst, I’m observing once more the excitement among competing investment firms as the inflow of funds picks up pace following Bitcoin’s 7% recovery to hit $66,000 on May 16th.

As a financial analyst, based on the latest data from Farside Investors, I’ve calculated that over $300 million flowed into all U.S. spot Bitcoin ETFs excluding BlackRock’s IBIT on May 15th. However, it’s important to note that BlackRock’s inflows for this specific date have not been reported yet.

2024-05-16 06:57

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