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Vanguard’s new CEO confirms there are no plans to launch a Bitcoin ETF fund despite industry interest

Despite the fact that the cryptocurrency market is gaining interest, Vanguard remains with its investment strategy, focusing on traditional financial instruments.

Date: 2024-05-16 Author: Marek Stiller
Vanguard’s new CEO confirms there are no plans to launch a Bitcoin ETF fund despite industry interest

Salim Ramji, the newly appointed CEO of Vanguard, confirmed that the company will not reverse its decision to refrain from launching a bitcoin fund (ETF).

In a recent interview with Barron’s, Ramji, who previously headed BlackRock‘s global ETF business, said Vanguard is committed to consistency, adding that cryptocurrency-related investment products are not in line with the company’s investment philosophy.

Ramji expressed his support for Vanguard’s chief investment officer, Greg Davis, and his decision to avoid an ETF on Bitcoin, noting that it is completely in line with Vanguard’s investment philosophy and represents a logical and consistent point of view.

Ramji oversaw the launch of the BlackRock ETF fund

Earlier this year, Ramji oversaw the launch of BlackRock’s bitcoin ETF, iShares Bitcoin Trust (IBIT), which has amassed $18 billion in assets under management .

Although Ramji had a personal interest in cryptocurrencies, his move to Vanguard sparked speculation about potential changes he could make at the company.

In contrast to Vanguard’s approach, other investment management firms such as Fidelity and nine additional firms have launched bitcoin funds, attracting a combined net inflow of more than $12 billion.

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Vanguard, which has significant assets under management (AUM) of $8.6 trillion, has decided to take a different view, viewing cryptocurrencies as speculative investments and recognizing that this asset class is in its early stages.

Although Bloomberg ETF analyst James Seyffart does not believe Ramji will launch a Vanguard bitcoin ETF, he suggests that Ramji may reconsider the company’s stance on allowing clients to purchase other bitcoin ETFs on Vanguard’s brokerage platform.

In March, outgoing Vanguard CEO Tim Buckley said the Bitcoin ETF was not suitable for long-term retirement portfolios, describing it as a speculative asset.

Buckley’s comments came after customers expressed dissatisfaction when Vanguard blocked access to Bitcoin ETFs after they were launched by rival firms. In fact, some Vanguard customers even threatened to close their accounts in response .

Vanguard has indirect contact with Bitcoin

It is worth noting that Vanguard indirectly has exposure to Bitcoin through its stake in MicroStrategy, where it is the second-largest institutional shareholder.

While Vanguard remains unwavering in its decision to avoid an ETF on Bitcoin, rival investment firms are reporting positive flows, as Bitcoin regained the $66,000 mark on May 16 with a 7% gain.

Preliminary data from Farside Investors shows that net inflows on May 15 to all U.S. Bitcoin ETFs exceeded $300 million, with the exception of BlackRock’s IBIT, for which results have not yet been released.

As we reported, Morgan Stanley, one of the leading financial institutions, is exploring the possibility of expanding sales of Bitcoin ETFs, allowing its approximately 15,000 brokers to actively recommend these products to clients.

Currently, Morgan Stanley offers ETFs on Bitcoin without a solicitation, meaning that clients must independently approach their advisors to express interest in investing.

LPL Financial, the largest independent brokerage with more than 22,000 brokers, announced plans in February to evaluate which Bitcoin funds it can offer clients.

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Marek Stiller
Marek Stiller
Founder of the "Cryptocurrency for Beginners" channel on YouTube. He collaborates with Łukasz to form the Arena Trading group, while at the same time being passionate about blockchain technology. His knowledge and experience in the cryptocurrency industry help beginner investors better understand this dynamic market.
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