Vanguard Opens Crypto ETF Trading to 50 Million Clients

Vanguard has dropped its long-standing opposition to digital assets and, starting Tuesday US time, will allow its 50 million clients globally to trade cryptocurrency-based assets via its brokerage platform, as reported by Bloomberg.

“Cryptocurrency ETFs and mutual funds have been tested through periods of market volatility, performing as designed while maintaining liquidity,” Andrew Kadjeski, Vanguard’s head of brokerage and investments, said.

“The administrative processes to service these types of funds have matured; and investor preferences continue to evolve.”

Vanguard is the world’s second-largest asset manager; it currently has around US$11 trillion (AU$16.8t) in assets under management. The inclusion of crypto-based products on its brokerage platform could potentially open the way for a new wave of TradFi-focussed investors buying into crypto.

Vanguard said that crypto-based products will be handled similarly to gold and other niche assets, meaning most of the crypto ETFs and mutual funds that meet regulatory requirements will be supported on their platform. However, products based on memecoins (as defined by the Securities and Exchange Commission) will remain absent.

Despite relaxing its staunch opposition to crypto, Vanguard still doesn’t intend to launch any crypto-based products of its own, Kadjeski explained.

Vanguard has no plans to launch its own crypto products, we serve millions of investors that have diverse needs and risk profiles, and we aim to provide a brokerage trading platform that gives our brokerage clients the ability to invest in products they choose.

Andrew Kadjeski, Vanguard head of brokerage and investments

Related: Bitcoin Pushes Past $90k on Mixed ETF Flows, While Analysts Warn of Fragile Support

Vanguard’s Decision Likely Influenced by BlackRock’s Success

Vanguard’s decision to allow its clients to trade crypto ETFs on its brokerage platform comes about a year after former BlackRock executive and crypto-believer, Salim Ramji, took over as CEO.

The success of BlackRock’s spot Bitcoin ETF, IBIT, no doubt influenced Vanguard’s decision to add crypto-based products to its platform. Since launching in January of 2024, IBIT and many other spot Bitcoin ETFs have seen persistent demand from both retail and institutional investors.

IBIT alone currently has over US$70 billion (AU$106.9b) in assets under management, down from around US$100 billion (AU$152b) before the recent Bitcoin price plunge.

Despite this wave of institutional adoption in the past few years, Vanguard has until now remained effectively sidelined when it comes to crypto, having staunchly opposed any shift toward digital assets.

In November 2021, Vanguard Australia published an article titled ‘Cryptocurrencies and Vanguard: what we think,’ in which the firm essentially trashed crypto as a poor investment.

“Since cryptocurrencies are highly speculative in their current state, Vanguard believes their long-term investment case is weak,” Vanguard explained in the article.

“As many of our investors know, our investing philosophy encourages staying the course and tuning out the noise. Our time-tested principles emphasise that investing for the long-term is essential and reacting to short-term trends can be costly for one’s portfolio.”

Related: IBIT Now BlackRock’s Highest-Grossing Product Despite $2.3B in November Outflows

The article’s authors did hedge their bets slightly, writing “as cryptocurrencies and blockchain become increasingly mainstream, we’ll continue to monitor their development and discern the best path forward for our investors.”

It looks like Vanguard has now decided the best path forward is to get aboard the crypto train, whether they’re “weak” investments or not.