Vanguard Misses the ETF Train: Many Clients Express Outrage
The recent decision by Vanguard, the world’s second-largest asset manager after BlackRock, not to include the new Bitcoin Spot ETFs in its product offering has frustrated several of its clients.
According to a report from the Wall Street Journal dated January 11th, Vanguard has confirmed that it will not allow the purchase of these ETFs on its brokerage platform. The company argues that these products do not align with its traditional offerings focused on asset classes such as stocks, bonds, and cash. Strangely, Vanguard still allows the sale of GBTC without allowing its purchase…
Wow. It is worse than I thought. I called and the answer I received was “Currently we aren’t allowing those to be purchased as it doesn’t fit with Vanguard’s investment philosophy.”
Me: “OK but you let me buy GBTC in the past.”
Him: “Yes I believe you can only sell that now.”
— Tony Spencer (@notsleepy) January 11, 2024
In response to this stance, some Vanguard clients, including Tony Spencer and Yuga Cohler, a senior engineer at Coinbase, have expressed their intention to transfer their savings and investments to platforms like Fidelity, which launched one of the 10 Bitcoin ETFs on January 11th. They believe Vanguard’s blocking of Bitcoin Spot ETFs does not align with their investment philosophy.
Several Investment Firms in the Same Boat as Vanguard
Vanguard’s decision may reflect a broader trend among major investment firms, with several clients of Citi, Merrill Lynch, Edward Jones, and UBS also reporting the unavailability of Bitcoin Spot ETFs on their platforms. Merrill Lynch is considering offering the purchase of these products once their trading efficiency is confirmed. In contrast, JPMorgan has made Bitcoin Spot ETF trading accessible on its platform despite recent anti-Bitcoin statements from its CEO.
Meanwhile, Robinhood has just announced the listing of the 11 newly launched Bitcoin Spot ETFs.
This situation comes after the long-awaited regulatory approval of Bitcoin Spot ETFs on January 10th. Trading volumes for these ETFs reached $4.5 billion on the first day, with significant participation from BlackRock, Grayscale, and Fidelity products.