Famous asset management company Vanguard has recently clarified its stance on the creation of Bitcoin ETFs.
Despite the wave of excitement surrounding spot Bitcoin ETFs entering the industry, Vanguard confirmed that it has no plans to create a Bitcoin ETF or any other crypto-related product.
In a recent Q&A, two Vanguard leaders, Global Head of ETF Capital Markets and Broker & Index Relations Janel Jackson and Head of Brokerage & Investments Andrew Kadjeski, shed light on the company's decision.
Jackson noted that given the current state of cryptocurrencies as an asset class, Vanguard does not plan to launch its own Bitcoin ETF or any crypto-related products. The company executive said it considers a number of factors when deciding which investment products to offer, including whether they believe the products have lasting investment value and meet their clients' needs.
Despite the growing controversy surrounding Bitcoin and cryptocurrencies in general, Vanguard does not currently believe they have an appropriate role to play in long-term portfolios, according to the statement.
Kadjeski explained that investors have so many options these days about where to save for retirement, where to invest for their children's education, and where to keep emergency savings. Investors who come directly to Vanguard do so because they know their interests come first, according to the executive.
While it would have been easy for Vanguard to allow full access to cryptocurrency-related products, the company has deliberately structured itself to meet the needs of its investor clients, many of whom are long-term, buy-and-hold investors, according to the statement.
Jackson added that in Vanguard's view, cryptocurrencies are more of a speculation than an investment. According to the statement, this is the basis for their decision not to offer crypto products. Although crypto is classified as a commodity, it is an immature asset class with little history, no inherent economic value, no cash flow, and can create havoc within a portfolio, according to Jackson.
*This is not investment advice.
“many of whom are long-term, buy-and-hold investors,” for which Bitcoin is very rewarding so far.