Vanguard revisits its position and allows cryptocurrency ETFs on its platform
Vanguard Group, the second largest asset manager in the world, has authorized the trading of ETFs and mutual funds backed by major cryptocurrencies on its platform starting Tuesday.
According to Bloomberg, starting Tuesday, December 2, Vanguard will allow trading of ETFs and mutual funds primarily backed by individual cryptocurrencies, including Bitcoin, Ethereum, XRP, and Solana.
The fact that this decision was made despite a decline of over 1 trillion dollars in the total market capitalization of cryptocurrencies since the beginning of October contradicts Vanguard's long-standing view that digital assets are too volatile and speculative for serious portfolios.
Since their debut in January 2024, spot Bitcoin ETFs have accumulated billions of dollars in assets. Even after recent capital outflows and the decline in the price of Bitcoin, Vanguard's largest competitor, BlackRock, still holds about 70 billion dollars in its single IBIT ETF, down from about 100 billion dollars two months ago.
Client demand is behind the change
Vanguard's change of direction opens access for regulated cryptocurrency providers to over 50 million brokerage clients, who collectively control over 11 trillion dollars in assets.
This change comes more than a year after Salim Ramji, former BlackRock executive and long-time advocate for blockchain, took the helm at Vanguard. At that time, the company stated it would support most ETFs and crypto mutual funds that meet regulatory requirements, similar to its approach to other non-essential asset classes such as gold.
