A number of Vanguard customers are reportedly considering closing their accounts after the investment management company announced that it would not offer the newly approved spot Bitcoin Exchange-Traded Funds (ETFs) on its brokerage platform. According to a January 11 report by The Wall Street Journal, Vanguard stated that these products do not align with its focus on traditional asset classes like equities, bonds, and cash.
Vanguard’s statement read, “Spot bitcoin ETFs will not be available for purchase on the Vanguard platform. We also have no plans to offer Vanguard bitcoin ETFs or other crypto-related products.” This decision is in line with the company’s investment philosophy, which does not currently include cryptocurrencies.
Some customers, like Tony Spencer, expressed dissatisfaction with Vanguard’s decision, citing a spokesperson’s remarks that the Bitcoin ETFs do not fit Vanguard’s investment philosophy. Spencer also mentioned that Vanguard only permits the selling of Grayscale’s flagship Bitcoin product, the Grayscale Bitcoin Trust, which has recently been converted into a spot ETF.
In response, individuals like Coinbase’s senior engineering manager Yuga Cohler have stated intentions to transfer their Roth 401(k) savings from Vanguard to Fidelity, which issued one of the recently launched spot Bitcoin ETFs. Similarly, Bitcoin commentator Neil Jacobs revealed plans to move funds out of Vanguard due to the company’s stance on Bitcoin ETFs.
Apart from Vanguard, customers of other investment firms such as Citi, Merrill Lynch, Edward Jones, and UBS also reported difficulties in purchasing spot Bitcoin ETFs on their respective platforms. A UBS source disclosed that the firm is considering “unsolicited offers” for the ETFs on a case-by-case basis, while a Citi spokesperson mentioned that a spot Bitcoin ETF is already available to its institutional clients and under evaluation for individual wealth clients.
Meanwhile, Merrill Lynch is reportedly awaiting the efficient trading of these ETFs before deciding to offer them. On the other hand, JPMorgan, an authorized participant of BlackRock’s iShares Bitcoin Trust ETF, has made spot Bitcoin ETF trading accessible on its platform but with a risk disclosure for potential investors.
The trading of spot Bitcoin ETFs began on January 10 after receiving approval from the United States Securities and Exchange Commission, with notable trading volumes from BlackRock, Grayscale, and Fidelity’s Bitcoin ETFs. Other firms like ARK 21Shares, Invesco Galaxy, VanEck, WisdomTree, Valkyrie, Bitwise, Franklin Templeton, and Hashdex have also received or are awaiting regulatory approvals.