Vanguard’s decision not to offer spot Bitcoin exchange-traded funds (ETFs) on its platform has led to some customers considering moving their funds to other platforms. This move by Vanguard, reported on January 11 by The Wall Street Journal, aligns with the company’s stance of focusing on traditional asset classes like equities, bonds, and cash, rather than cryptocurrency-related products.
A Vanguard spokesperson stated that spot Bitcoin ETFs do not align with their investment philosophy, which prioritizes long-term, balanced investment portfolios. Consequently, Vanguard did not apply to issue a spot Bitcoin ETF in 2023, unlike 14 other issuers. This decision has prompted some investors, like Tony Spencer and Coinbase’s senior engineering manager Yuga Cohler, to transfer their investments to other platforms like Fidelity, which launched one of the 10 new spot Bitcoin ETFs on January 11.
Bitcoin commentator Neil Jacobs is also reportedly transferring his funds out of Vanguard in response to this decision. Meanwhile, other investment firms like Citi, Merrill Lynch, Edward Jones, and UBS have also reported difficulties in offering spot Bitcoin ETFs on their platforms. UBS is considering unsolicited offers for the ETF on a case-by-case basis, while Citi has made a spot Bitcoin ETF available for its institutional clients and is evaluating it for individual wealth clients. Merrill Lynch is waiting to observe the trading efficiency of these ETFs before making a decision.
JPMorgan, on the other hand, has made spot Bitcoin ETF trading available on its platform and is an authorized participant of BlackRock’s iShares Bitcoin Trust ETF. However, the bank has issued a risk disclosure to potential investors.
The first day of spot Bitcoin ETF trading on January 10 saw significant volumes, with over 4.5 billion in trades, primarily from BlackRock, Grayscale, and Fidelity’s Bitcoin ETFs. The United States Securities and Exchange Commission has approved the applications of several other firms, including ARK 21Shares, Invesco Galaxy, VanEck, WisdomTree, Valkyrie, Bitwise, and Franklin Templeton, with Hashdex still awaiting approval.
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