The decision to reject the Bitcoin ETF proposal was based on Vanguard’s typical emphasis on long-term stability rather than short-term trends, according to company officials.
Vanguard has chosen to turn a blind eye to the Bitcoin ETF competition, while other major financial institutions have been actively competing. The investing philosophy of Vanguard is at odds with Bitcoin ETFs; hence, the firm has opted not to provide its customers with exposure to them. Strangely, Vanguard views Bitcoin as a developing asset class.
During a recent question and answer session, Janel Jackson—the global head of ETF capital markets and broker and index relations at Vanguard—said this. While elaborating on the firm’s stance on digital assets like Bitcoin, Jackson stated:
“Despite crypto’s commodity status, it’s still a very young asset class with a nascent history, zero intrinsic economic value, zero cash flow, and the potential to wreak havoc on investment portfolios.”
Additionally, she said that given the present situation of cryptocurrencies, Vanguard is not inclined to provide Bitcoin ETFs or any other investment products relating to cryptocurrencies. Cryptocurrency does not yet meet the criteria set forth by Vanguard’s stringent decision-making process, according to Jackson.
Vanguard maintains that cryptocurrencies lack long-term investment appeal, despite their increasing usage. Therefore, cryptos are not something that Vanguard recommends its customers include in their portfolios for the long run.
The majority of Vanguard’s investors are there for the long haul, according to Andrew Kadjeski, Head of Brokerage & Investments at the firm. It was his hope that these customers would find that Vanguard’s products met their needs. While offering full access to cryptocurrency products may be a simple solution, it goes against Vanguard’s mission to serve the long-term interests of its investor-owners.
Jackson and Kadjeski drew attention to the fact that Vanguard has always put an emphasis on the long term rather than fleeting fashions. According to Vanguard, this strategy is not new. Investing in online funds was all the rage in the ’90s, but Vanguard was ahead of the curve.
Many in the cryptocurrency industry are upset that Vanguard has decided not to invest in crypto funds. Some customers, particularly those who want to see cryptocurrency included in investing portfolios, are unhappy with the firm because of its stance on more conventional asset classes like stocks, bonds, and cash.
Also Read: Crypto Draws Chinese Investors Amid Economic Uncertainty January 29, 2024
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