Bank of America and Vanguard Restrict Access to Bitcoin ETFs

Asset managers Vanguard and Merrill Lynch are not allowing customers to purchase spot Bitcoin ETFs.
Vanguard claims Bitcoin does not align with its “investment philosophy”; the company founder has historically had a negative view of crypto.
Lack of access driving customers away, some creating accounts with competitors.

Several large asset managers are denying their customers access to the newly-approved spot Bitcoin ETFs. Customers of Vanguard—the second-largest asset manager in the world—have reported being blocked from purchasing the Bitcoin ETFs, while the Bank of America-owned investment manager, Merrill Lynch, is also said to be blocking customer access to the ETFs.

Image of failed transaction. Source @Maebelffuts via X.

A number of users of the social media platform X said they’d now switch to alternative providers, such as BlackRock, Fidelity and Charles Schwab, which do allow access to the Bitcoin ETFs.

Why Are Bitcoin ETFs Being Blocked?

Speaking to CoinDesk, a representative from Vanguard claimed the firm is blocking spot Bitcoin ETFs because they don’t align with its philosophy of allowing customers to “build blocks of a well-balanced, long-term investment portfolio”. The representative also said the firm has no plans to offer Bitcoin ETFs or any other crypto-related investment products.

Users on X have also shared stories of being told similar information from Vanguard employees, with one claiming he phoned Vanguard about his inability to access Bitcoin ETFs and was told: “Currently we aren’t allowing those to be purchased as it doesn’t fit with Vanguard’s investment philosophy.”

Wow. It is worse than I thought. I called and the answer I received was “Currently we aren’t allowing those to be purchased as it doesn’t fit with Vanguard’s investment philosophy.”
Me: “Ok but you let me buy GBTC in the past.”
Him: “Yes I believe you can only sell that now.”
— Tony Spencer (@notsleepy) January 11, 2024

Vanguard has a history of antipathy towards crypto, with the firm’s founder, Jack Bogle, famously declaring in 2017 “Avoid Bitcoin like the plague…There is nothing to support Bitcoin except the hope that you can sell it to someone for more than you paid for it.”

The situation with Merrill Lynch seems to be a little more positive, with an anonymous source with knowledge of the matter suggesting the firm is still assessing the new ETFs and may list them in the future.

Users Migrate To Bitcoin-Friendly Platforms

Some X users have aired their frustration with Vanguard, in particular, and have reported migrating to a more crypto-friendly competitor, and encouraged others to do the same.

Despite the discontent, some believe most platforms will eventually offer access to the Bitcoin ETFs once they’ve been internally evaluated:

It takes time for banks, brokerages and wires to approve new ETFs, let alone novel type of new ETFs. I believe it’s just matter of time. Have seen this play out with alternative funds a few times. https://t.co/WwraGAO9cm
— Gabor Gurbacs (@gaborgurbacs) January 11, 2024