Vanguard's Outgoing CEO Steadfast in Rejecting Bitcoin ETFs Despite Customer Demands

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2024-03-19 15:44:07

In the face of mounting pressure from customers and persistent inquiries about the firm's plans, Tim Buckley, the outgoing CEO of Vanguard Group, has maintained his staunch opposition to offering a spot Bitcoin exchange-traded fund (ETF). Despite several of Vanguard's competitors already launching such products, Buckley remains resolute in his stance against including Bitcoin ETFs in the investment giant's lineup.


In a recent video published by Vanguard, Buckley cautioned against the inclusion of Bitcoin ETFs in retirement investment plans, citing the asset's volatile nature as a major deterrent. "We don't believe it belongs, like a Bitcoin ETF belongs in a long-term portfolio of someone saving for their retirement. It's a speculative asset," he stated.


Buckley further challenged Bitcoin's credibility as a store of value, pointing to the cryptocurrency's significant decline alongside the stock market crash of 2022. "When stocks got hammered in the recent crisis, Bitcoin went right with them. And so it is speculative. Really tough to think about how it belongs in a long-term portfolio," he remarked.


While Bitcoin reached an all-time high of over $69,000 in 2021, a milestone recently surpassed when it reached $73,835, the cryptocurrency experienced a sharp decline in 2022, plummeting to under $16,000. This downturn coincided with the S&P 500's 21% fall in the first half of 2022, largely attributed to the United States Federal Reserve's interest rate hikes.


Despite persistent inquiries from customers about when Vanguard might offer spot Bitcoin ETFs, Buckley stated that the firm remains adamant about not changing its stance "unless the asset class changes."


In the wake of the U.S. Securities and Exchange Commission's approval of 11 spot Bitcoin ETFs on January 10th, Vanguard swiftly announced its decision not to offer the product to its customers. On January 12th, Cointelegraph reported that Vanguard had "no plans to offer Vanguard Bitcoin ETFs or other crypto-related products."


This decision drew backlash from existing customers, particularly those within the crypto industry. Coinbase's senior engineering manager, Yuga Cohler, was among those who voiced their intention to transfer their Roth 401(k) savings from Vanguard to Fidelity, one of the approved spot Bitcoin ETF applicants, stating, "Vanguard's paternalistic blocking of Bitcoin ETFs does not fit in with my investment philosophy."


Ironically, despite its reluctance to offer a crypto product, Vanguard still maintains significant indirect exposure to Bitcoin, as it is the second-largest institutional holder of MicroStrategy, a company with substantial Bitcoin holdings. As of January 12th, Cointelegraph reported that Vanguard held an 8.24% stake in MicroStrategy.

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