Vanguard Group announced it will permit exchange-traded funds (ETFs) and mutual funds holding Bitcoin, Ethereum, XRP, and Solana to trade on its platform beginning Tuesday, marking a policy shift for the asset management firm.
Summary
- Vanguard will now allow ETFs and mutual funds holding Bitcoin, Ethereum, XRP, and Solana to trade on its platform, marking a notable shift from its long-held anti-crypto stance.
- The firm says crypto-backed ETFs have proven themselves during bouts of market volatility, prompting the move — but it still refuses to offer direct crypto trading.
- The policy reflects a “compromise,” giving investors regulated exposure to digital assets as demand rises across the financial industry.
Vanguard’s ‘compromise’
The decision represents a change in approach for Vanguard, which has historically maintained a conservative stance on cryptocurrency investments.
Recall last August when Vanguard CEO Salim Ramji emphasized a commitment to maintaining core principles, ruling out the launch of crypto ETFs despite competitor trends.
At the time, Ramji told ETF.com that Vanguard will not “copy competitors” and will remain true to its core principles, focusing on long-term strategies.
Despite the surge in crypto ETF offerings from firms like BlackRock, Ramji stressed the importance of consistency with Vanguard’s traditional approach, which prioritizes asset classes such as equities, bonds, and cash.
Why the change of tune?
Eric Balchunas reported that Vanguard stated the cryptocurrency-backed ETFs have performed as designed during periods of high market volatility. The firm cited this performance record as a factor in its decision to allow regulated crypto products on its platform.
Vanguard will not offer direct cryptocurrency trading under the new policy. The change will provide the firm’s clients access to major digital assets through regulated investment vehicles.
The asset manager characterized the policy internally as a compromise, according to the report.
The move follows similar decisions by other major financial institutions to offer cryptocurrency exposure to clients. Financial industry analysts have noted increasing investor demand for digital asset products in recent years.
Vanguard manages trillions of dollars in assets and serves millions of retail and institutional investors globally.
