The price of Bitcoin (BTC) rose by more than 6% on Wednesday, advancing toward the threshold of $94,000 during the early hours of the Asian session. This comes just hours after Vanguard lifted its long-standing ban on trading Bitcoin exchange-traded funds.
This sudden increase led to one of the strongest intraday moves in the quarter, raising new questions about how much conservative capital might now flow into cryptocurrency markets.
Surprising surge in Bitcoin price as Vanguard changes its stance towards digital currencies.
The price of Bitcoin rose above $93,000 on Wednesday, adding more than $200 billion to its market value in just 36 hours.
The rise began during the U.S. market open on Tuesday. Bitcoin was on track for its largest daily gain since May 2021, as the leading digital currencies approached $91,000, driven by a spike in short liquidations.
According to ETF analyst Eric Balschunas, this surge is attributed to the "Vanguard effect," which happened on the first day after the company lifted its ETF ban.
As BeInCrypto first reported on December 1, Vanguard ended its years-long ban on digital currencies. It now allows trading in Bitcoin, Ether, XRP, Solana, and other exchange-traded funds and mutual funds regulated for cryptocurrencies.
This represents a dramatic departure from its previous stance. For years, Vanguard executives argued that digital currencies lack intrinsic value, do not generate cash flows, and do not fit long-term retirement strategies.
The company rejected exchange-traded Bitcoin funds after their emergence in January 2024 and even restricted customer purchases of competing funds. However, since January 2024, analysts have predicted that the company would announce its stance.
"Vanguard's anti-Bitcoin stance aligns perfectly with the brand and would have made Bogle proud. However, I believe they will ease up in the coming years as they build their consulting business; they will need to access alternative asset classes," said Balschunas in a post dated January 13, 2024.
Notably, its restrictive stance forced many Vanguard clients to move their money to alternative firms. Client reactions were swift and decisive, as former Vanguard client Vanessa Harris shared her experience.
Harris said, "I moved my entire retirement account from Vanguard to Fidelity because Vanguard does not support exchange-traded Bitcoin funds and seems to be manipulating the price of Bitcoin by only allowing people to sell GBTC and not buy."
The post has since been deleted.
However, ongoing demand from clients, along with exchange-traded Bitcoin funds being one of the fastest-growing product categories in U.S. fund history, compelled a reevaluation of strategy.
Vanguard now says that Bitcoin and digital currency funds have been "tested and performed as designed across multiple periods of volatility."
While the company still refuses to launch its own digital currency products or support meme-linked currency funds, the mere opening of access represents one of the most significant institutional shifts in 2025.
Institutional momentum rises through IBIT and Vanguard.
Balschunas noted that BlackRock's IBIT fund reached $1 billion in trading volume within the first 30 minutes, as Vanguard saved Bitcoin just before the Christmas holiday, which is when trading begins.
The wave of inflow was not limited to Balschunas' notes. Analyst Crypto Rover stated that the price movement is not a mystery.
"That's why Bitcoin is pumping... Vanguard just lifted the ban on the Bitcoin exchange-traded fund, and a wave of new institutional investors rushed through the BlackRock $IBIT ETF. $IBIT from BlackRock alone achieved trading volume exceeding $1.8 billion in the first two hours," he wrote.
On the other hand, market observer Vivek Singh reported that Vanguard's Bitcoin funds volume exceeded $1 billion within the first 30 minutes, describing the surge as "madness."
These rapid flows indicate that part of the previously suppressed demand, which included conservative investors focused on retirement who could not access exchange-traded Bitcoin funds, may have entered the market once the restriction disappeared.
One-time explosion or the beginning of a larger trend?
Despite the enthusiasm, analysts remain divided on whether Vanguard's reversal represents a structural shift. When asked if this was a short-term effect after lifting the ban or the beginning of a systematic flow of conservative capital into exchange-traded Bitcoin funds, Balschunas urged caution.
"I doubt it. I think a small percentage of people were suppressed. It's good to be on the platform and available. You never know when others might allocate. However, you can't rely on ETF Boomers for everything," he warned.
This note highlights a major tension, which is that while access to the institutional category expands, the long-term behavior of traditional investors remains uncertain.
Bitcoin, Ethereum, XRP, and Solana, among the digital currencies that emerged in Vanguard's new shift, are rising. BTC was trading at $93,562 at the time of writing, up nearly 10% in the last 24 hours.
If the flow of conservative capital into investment funds and other instant ETFs continues, the market could enter a new phase of liquidity expansion. However, if this surge is merely a release of pent-up demand, momentum may settle quickly.
In either case, Vanguard's turnaround ensures that the wall between traditional finance and digital currencies has become much weaker, and investors are reacting quickly.