Vanguard’s New CEO Confirms No Intentions to Launch Bitcoin ETF Despite Industry Interest
In a recent interview with Barron’s, Salim Ramji, the newly appointed CEO of Vanguard, has stated that the company will stick to its decision of not launching a spot Bitcoin exchange-traded fund (ETF). Ramji, who previously led BlackRock’s global ETF business, emphasized the importance of consistency and explained that cryptocurrency-related investment products do not align with Vanguard’s investment philosophy.
Ramji expressed his support for Vanguard’s Chief Investment Officer, Greg Davis, and his reasoning behind the decision to avoid a Bitcoin ETF. He believes that it is in line with Vanguard’s investment philosophy and represents a logical and consistent standpoint.
Earlier this year, Ramji oversaw the launch of BlackRock’s spot Bitcoin ETF, the iShares Bitcoin Trust (IBIT), which has amassed $18 billion in assets under management. Despite his personal interest in cryptocurrencies, Ramji’s move to Vanguard has sparked speculation about potential changes he might make at the firm.
While other investment management companies like Fidelity and nine additional firms have launched spot Bitcoin funds, attracting over $12 billion in net inflows, Vanguard has taken a different approach. With its substantial $8.6 trillion in assets under management (AUM), Vanguard views cryptocurrencies as speculative investments and considers the asset class to be in its early stages of development.
Bloomberg ETF analyst James Seyffart believes that Ramji is unlikely to introduce a Vanguard spot Bitcoin ETF. However, he suggests that Ramji might reconsider the company’s stance on allowing clients to purchase other spot Bitcoin ETFs on Vanguard’s brokerage platform.
In March, Vanguard’s outgoing CEO, Tim Buckley, stated that a Bitcoin ETF is not suitable for long-term retirement portfolios and classified it as a speculative asset. This decision resulted in dissatisfaction among customers, some of whom threatened to close their accounts.
Despite Vanguard’s avoidance of a Bitcoin ETF, it is worth noting that the company indirectly holds exposure to Bitcoin through its stake in MicroStrategy, where it stands as the second-largest institutional shareholder.
While Vanguard remains firm in its decision, other investment firms are experiencing positive flows as Bitcoin surged to the $66,000 mark with a 7% increase on May 16. Preliminary data from Farside Investors shows that net inflows for May 15 across all U.S. spot Bitcoin ETFs exceeded $300 million, except for BlackRock’s IBIT, for which results were yet to be reported.
Morgan Stanley, a leading financial institution, is currently exploring the possibility of expanding its sales of Bitcoin ETFs by allowing its approximately 15,000 brokers to actively recommend these products to customers. Currently, they offer Bitcoin ETFs on an unsolicited basis, meaning customers have to independently approach their advisors to express interest.
LPL Financial, the largest independent brokerage with over 22,000 brokers, announced plans in February to evaluate which Bitcoin funds it could offer to customers.
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