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Vanguard clients are reportedly looking to exit the platform following the asset manager’s decision not to facilitate the purchase of new spot Bitcoin ETFs. The company cited a misalignment with their traditional offerings, emphasizing their focus on asset classes like equities, bonds, and cash for a well-balanced, long-term investment portfolio.
Citi, Merrill Lynch, Edward Jones, and UBS have all reportedly excluded spot Bitcoin ETFs from their current offerings on their respective brokerage platforms.
Vanguard chose not to apply for a spot Bitcoin ETF in 2023, prompting some investors to explore alternative platforms. Tony Spencer, a purported Vanguard customer, states that the firm justified this decision, citing a misalignment with Vanguard’s investment philosophy. Allegedly, Vanguard restricts investors to selling Grayscale’s flagship Bitcoin product, the recently transformed Grayscale Bitcoin Trust, now a spot ETF.
The new $BTC Spot ETFs are apparently being blocked from being purchased by clients of @Vanguard_Group, the second-largest asset manager in the world behind @BlackRock, on the grounds that the offerings “do not align with Vanguard’s investment philosophy.
🚨NEW: @Vanguard_Group, the world’s second largest asset manager behind @BlackRock, is reportedly blocking its customers from buying into the new $BTC Spot ETFs, saying the products “don’t fit with Vanguard’s investment philosophy.”
Now we’ll start to see how institutional… https://t.co/LmZodeYyad
— Eleanor Terrett (@EleanorTerrett) January 11, 2024
Yuga Cohler, the senior engineering manager at Coinbase, announced his intention to transfer his Roth 401(k) savings from Vanguard to Fidelity. Notably, Fidelity issued one of the ten spot Bitcoin ETFs that debuted on January 11.
Cohler expressed his disagreement with Vanguard’s decision to block Bitcoin ETFs, stating, “Vanguard’s paternalistic stance doesn’t align with my investment philosophy.” Meanwhile, Neil Jacobs, a Bitcoin commentator, shared his discontent with the reported move and is currently in the process of shifting his funds away from Vanguard, labeling it a “terrible business decision” by the firm.
Vanguard won’t allow its clients to utilize their personal funds to purchase Bitcoin ETFs.
Vanguard refuses to let customers buy #Bitcoin ETFs with their own money.
So customers are closing their accounts‼️ pic.twitter.com/11o1tOHR9S
— Bitcoin Archive (@BTC_Archive) January 11, 2024
Customers of investment giants such as Citi, Merrill Lynch, Edward Jones, and UBS reported difficulties purchasing spot Bitcoin ETFs on their platforms, as per the WSJ. UBS is reviewing “unsolicited offers” for spot Bitcoin ETF investments on a case-by-case basis, considering them suitable only for “aggressive investors.” While some of the approved spot Bitcoin ETFs are available on the UBS platform, not all have been included.
Citi mentioned that a spot Bitcoin ETF is accessible for its institutional clients, with evaluations ongoing for individual wealth clients. Merrill Lynch is reportedly observing the efficiency of spot Bitcoin ETF trading before deciding to offer these products to potential investors. Interestingly, JPMorgan’s brokerage platform permits spot Bitcoin ETF trading, as the bank is an authorized participant in BlackRock’s iShares Bitcoin Trust ETF. However, Jamie Dimon’s bank has shared risk disclosure with prospective investors contemplating trade orders, according to Dan McArdle, co-founder of Messari.
Trading commenced on January 10th after extensive anticipation of regulatory approval.
On the inaugural trading day, spot Bitcoin ETF volumes soared to over $4.5 billion, with substantial contributions from major players like BlackRock, Grayscale, and Fidelity’s Bitcoin ETFs.
The U.S. Securities and Exchange Commission greenlit the 19b-4 and Form S-1 applications for ARK 21Shares, Invesco Galaxy, VanEck, WisdomTree, Valkyrie, Bitwise, and Franklin Templeton. Hashdex is still awaiting S-1 approval.
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