Recently, there has been significant news regarding the approval of spot Bitcoin ETFs. It has come to light that several Wall Street firms are restricting client access to these ETFs, opting not to trade them on their platforms.
Notably, The Vanguard Group, the world’s second-largest asset manager after BlackRock, has explicitly stated their disinterest in these spot Bitcoin ETFs. Similarly, Merrill Lynch has issued a corresponding statement.
Vanguard: Spot Bitcoin ETFs Do Not Fit With Our Investment Philosophy
As many are aware, spot Bitcoin ETFs received approval on January 10, 2024, and commenced trading the next day. Vanguard, a major U.S. financial firm with $7.2 trillion in assets under management, has barred its clients from purchasing Bitcoin spot ETFs on their platform.
According to a Vanguard spokesperson, these ETFs conflict with the company’s investment philosophy, citing their high volatility as contradictory to the firm’s goal of aiding investors in achieving sustainable real returns.
Plot Twist: BlackRock Is A Major Shareholder Of Vanguard
A surprising twist in the narrative is BlackRock’s significant stake in Vanguard. Bloomberg and CNN Business report that BlackRock holds a 13.58% share in Vanguard, owning 3.9 million shares. This ownership allows BlackRock to influence decisions regarding Vanguard’s investments.
Curiously, BlackRock has had their iShares Bitcoin Trust (IBIT.O) approved, yet Vanguard refuses to allow trading of this ETF on their platform – a decision that seems contradictory.
Read: Vanguard’s Significant Investments Signal Growing Institutional Interest In Bitcoin Mining
What History Has Shown Us
This situation is unusual but not unprecedented. Traditional finance firms have historically been resistant to embracing cryptocurrency. However, as history has shown, they may eventually have to adapt to market demands, including offering Bitcoin and other spot ETFs. This adaptation is likely driven by the movement of capital to firms that provide these services.
Notable industry figures have commented on this trend. For example, Abra’s CEO Bill Barhydt suggested that Vanguard might regret its current stance on Bitcoin. He pointed out the dynamic nature of Bitcoin and its potential impact on financial institutions like Vanguard.
CEO of Abra Bill Barhydt tweeted out saying, “Wow. I suspect Vanguard is going to regret this. Bitcoin doesn’t care about Vanguard. Vanguard will care about Bitcoin.”
Read: Bitcoin’s Next Chapter: What To Expect After Spot Bitcoin ETFs Have Been Approved?
Final Thoughts
In conclusion, the restriction of Bitcoin spot ETFs, ironically, contradicts the essence of Bitcoin’s unrestricted nature. While some may find humor in this situation, it highlights the ongoing tension and evolving landscape of cryptocurrency in traditional finance.