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Vanguard’s new CEO says he has no plans to launch Bitcoin ETFs despite industry interest
Last Updated: May 16, 2024 12:36am EDT | 2 minute read
Salim Ramji, the new CEO of Vanguard, has confirmed that the company will not reverse its decision to refrain from launching a spot Bitcoin exchange-traded fund (ETF).
In a recent interview with BarronRamji, who previously headed BlackRock’s global ETF business, said Vanguard is committed to consistency, adding that cryptocurrency-related investment products do not align with the firm’s investment philosophy.
Ramji expressed his support for Vanguard’s Chief Investment Officer, Greg Davis, and explained the decision to avoid a Bitcoin ETF, noting that it is entirely consistent with Vanguard’s investment philosophy and represents a logical and consistent point of view.
Ramji oversaw the launch of BlackRock’s ETF
Earlier this year, Ramji oversaw the launch of BlackRock’s spot Bitcoin ETF, the iShares Bitcoin Trust (IBIT), which amassed $18 billion in assets under management.
While Ramji has shown a personal interest in cryptocurrencies, his move to Vanguard has sparked speculation about potential changes he could bring to the company.
In contrast to Vanguard’s approach, other investment management firms such as Fidelity and nine other firms have launched Bitcoin spot funds, collectively attracting more than $12 billion in net inflows.
Vanguard, with its substantial assets under management (AUM) of $8.6 trillion, has opted for a different stance, viewing cryptocurrencies as speculative investments and considering the asset class to be in its early stages of development.
While Bloomberg ETF analyst James Seyffart doesn’t believe Ramji will introduce a Vanguard Bitcoin spot ETF, he suggests that Ramji may reconsider the company’s stance on allowing clients to purchase other Bitcoin spot ETFs on Vanguard’s brokerage platform .
In March, Vanguard’s outgoing CEO, Tim Buckley, said a Bitcoin ETF is not suitable for long-term pension portfolios, characterizing it as a speculative asset.
Buckley’s comments came after clients expressed dissatisfaction when Vanguard blocked access to spot Bitcoin ETFs following their launch by rival firms.
In fact, some Vanguard customers even threatened to close their accounts in response.
Vanguard has indirect exposure to Bitcoin
It is worth noting that Vanguard indirectly holds exposure to Bitcoin through its stake in MicroStrategywhere it represents the second largest institutional shareholder.
While Vanguard remains steadfast in its decision to avoid a Bitcoin ETF, rival investment firms are seeing positive flows as Bitcoin retook the $66,000 mark with a 7% increase on May 16.
Preliminary data from Farside Investors indicates that net inflows for May 15 across all U.S. spot Bitcoin ETFs exceeded $300 million, except BlackRock’s IBIT, for which results had yet to be reported .
As reported, Morgan Stanley, a major financial institution, is explore the possibility of expansion its sales of Bitcoin ETFs allowing its approximately 15,000 brokers to actively recommend these products to clients.
Currently, Morgan Stanley offers Bitcoin ETFs on an unsolicited basis, meaning clients must approach their advisors independently to express interest in investing.
LPL Financial, the largest independent brokerage with more than 22,000 brokers, announced in February that it planned to evaluate what Bitcoin funds it could offer customers.