Vanguard Maintains Traditional Approach Despite SEC’s Spot Ethereum ETF Approval

3 mins
Updated by Daria Krasnova
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In Brief

  • Vanguard maintains its stance against spot Ethereum ETFs, sticking to traditional assets.
  • The firm emphasizes equities, bonds, and cash for long-term portfolios, avoiding crypto volatility.
  • Incoming CEO Salim Ramji supports current product offerings despite his crypto background.
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Vanguard has reaffirmed its position against offering spot Ethereum ETFs on its platform, maintaining its cautious approach toward cryptocurrency products.

This stance follows the US Securities and Exchange Commission’s (SEC) approval of spot Ethereum exchange traded funds.

Vanguard’s Stance on Traditional Investments Against ETFs

Despite the SEC’s green light, Vanguard remains firm. Managing assets worth approximately $7.7 trillion, the company has consistently highlighted its commitment to traditional asset classes like equities, bonds, and cash. Vanguard believes these form the core of a well-balanced, long-term investment portfolio.

“While we continuously evaluate our brokerage offering and assess new product entries, spot Ethereum ETFs will not be available for purchase on the Vanguard platform,” a company spokesperson said.

Vanguard’s position contrasts with some of its competitors. Fidelity and Charles Schwab have embraced cryptocurrency products, allowing their clients to trade spot Bitcoin ETFs. BlackRock, another major asset management player, has launched a Bitcoin fund that has amassed nearly $20 billion in assets. However, Vanguard’s decision reflects a strategic choice to avoid the volatility and regulatory uncertainties associated with cryptocurrencies.

“This firm statement from Vanguard only serves to highlight how incredible it is to see institutional investors fully embracing Bitcoin. That didn’t come easy for them, as these players tend to do their research and play it safe. It also harkens back to what Michael Saylor was saying about BTC being the preferred institutional grade crypto-asset. Where Bitcoin has stood the test of time and established itself as the de facto decentralized asset of the Unternet, Ethereum clearly still has a few kinks to work out, and I think Vanguard’s decision really highlights this,” Mati Greenspan, Founder & CEO of Quantum Economics, shared with BeInCrypto.

Read more: How to Invest in Ethereum ETFs?

Salim Ramji, set to become Vanguard’s CEO in July, previously led BlackRock’s ETF business and played a crucial role in preparing the spot Bitcoin ETF. Despite his background and apparent interest in crypto, Ramji has committed to maintaining Vanguard’s existing product offerings. “Consistency in terms of products and services remains a priority,” he noted in an interview with Barron’s.

Industry experts speculate on Vanguard’s future direction under Ramji’s leadership. Ric Edelman, founder of the Digital Assets Council of Financial Professionals, suggests that Vanguard might eventually enter the cryptocurrency ETF space. Bloomberg ETFs analyst Eric Balchunas considers the possibility of such a development, citing the new CEO’s crypto past. Other prominent names, meanwhile, see Vanguard’s actions as logical.

“Vanguard have always been known in the financial world to be risk adverse. This is a logical and sensible step for them. Many do argue that ETH is more immature than Bitcoin (and is also a technology set which has gone through multiple changes over the years). Unlike Bitcoin which has been very ‘hands off’ since its creation. There is a worry that changes to the technology and the ‘asset’ could cause market instability,” Cal Evans, Fortune Wallet Founder and industry veteran, told BeInCrypto.

Read more: Ethereum ETF Explained: What It Is and How It Works

Vanguard’s cautious stance is also influenced by broader regulatory and legislative trends. Growing bipartisan support for legislation in favor of cryptocurrencies is indicative of a shift that the company is watching closely. However, for now the asset manager is determined that cryptocurrencies do not fit within its investment framework.

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Shota Oba
After interning at a domestic blockchain media company while enrolled at a university in international relations, he worked as an intern trainee at two foreign crypto asset exchanges. Currently, as a journalist, he focuses on the Japanese crypto asset market, both technical and fundamental analysis. He has been trading crypto assets since 2021 and is interested in economic and social affairs.
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