Banks such as Bank of America Corp. and Wells Fargo & Co. have announced their foray into crypto by providing spot Bitcoin exchange-traded funds (ETFs) for their clients. This major move follows other investment platforms such as Fidelity Investments, Charles Schwab Corp. and Robinhood Markets Inc. doing the same.
One notable holdout so far has been Vanguard, but some have speculated that may change soon.
Vanguard is searching for a replacement for CEO Tim Buckley, who is set to retire this year.
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Vanguard customers attempting to buy a spot Bitcoin ETF through the platform have run into an error message saying that the “trade cannot be completed” and that “securities may be unavailable for purchase at Vanguard due to a number of variables including regulatory restrictions, corporate actions or various trading and/or settlement limitations.”
A Vanguard spokesperson later elaborated on the error message, sharing that crypto products don’t align with the company’s philosophy of asset classes that “build blocks of a well-balanced, long-term investment portfolio.”
While more of Wall Street is getting in on the excitement around crypto, other legendary investors remain cautious.
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Take Warren Buffett’s comments from his most recent shareholder letter.
“Wall Street … would like its customers to make money, but what truly causes its denizens’ juices to flow is feverish activity,” Buffett wrote in his annual letter to shareholders in February. “At such times, whatever foolishness can be marketed will be vigorously marketed.”
While he did not specifically call out Bitcoin in the letter and has been wrong in his predictions for the asset so far, even saying in early 2018 that if he could buy a five-year put on cryptocurrencies he would, Wall Street’s recent warming to Bitcoin comes as Bitcoin nears an all-time high.
However, Vanguard’s absence from the space has not hurt its ability to draw in new client assets, as its client base tends to have less interest in trading volatile markets than that of its peers.
In a Vanguard study that looked at the trading activity for 9.1 million self-directed investors from Jan. 1 through May 23, 2022, a volatile time in the market, only 13.3% of households bought or sold securities.
“The results for that period underscore our longstanding finding that trading at Vanguard in response to volatile markets occurs among a small fraction of households,” Vanguard Senior Investment Strategist Jean Young said.
James Seyffart, an analyst for Bloomberg, recently shared that Vanguard’s Vanguard S&P 500 ETF (NYSE:VOO), which passively tracks the S&P 500 index, has already brought in over $15.7 billion in new money so far this year.
In comparison, BlackRock Inc.’s spot Bitcoin ETF, the iShares Bitcoin ETF (NASDAQ:IBIT), has only attracted half of that over the same period.
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This article Vanguard’s Anti-Bitcoin CEO Set to Retire As Major Banks Begin Offering Spot Bitcoin ETFs To Clients originally appeared on Benzinga.com
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