Vanguard opens trading for crypto-backed ETFs and funds
Vanguard Group, the world’s second-largest asset manager, has allowed trading of ETFs and mutual funds backed by major cryptocurrencies on its platform starting Tuesday.
According to Bloomberg, beginning Tuesday, December 2, Vanguard will permit trading in ETFs and mutual funds primarily backed by individual cryptocurrencies, including Bitcoin, Ethereum, XRP, and Solana.
The fact that this decision was made despite a more than $1 trillion decline in the total cryptocurrency market capitalization since the beginning of October contradicts Vanguard’s long-standing view that digital assets are too volatile and speculative for serious portfolios.
Since their debut in January 2024, spot Bitcoin ETFs have accumulated billions of dollars in assets. Even after recent outflows and the decline in Bitcoin’s price, Vanguard’s largest competitor, BlackRock, still holds around $70 billion in its IBIT ETF alone, down from approximately $100 billion two months ago.
Client demand drives the shift
Vanguard’s change in direction opens access to regulated crypto providers for more than 50 million brokerage clients, who collectively control over $11 trillion in assets.
“Crypto ETFs and mutual funds have proven resilient during periods of market volatility, performing as expected and maintaining liquidity,” said Andrew Kadjeski, Head of Brokerage and Investments at Vanguard, adding that “the operational processes supporting these types of funds have matured, and investor preferences continue to evolve.”
The shift comes more than a year after Salim Ramji, former BlackRock executive and long-time blockchain advocate, took over as CEO of Vanguard. At the time, the company said it would support most crypto ETFs and mutual funds that meet regulatory requirements, similar to its approach to other non-core asset classes such as gold.
At the same time, Vanguard does not plan to launch its own digital asset products in the near future, and funds linked to memecoins, as defined by the SEC, will remain excluded.
As we wrote, $11 trillion giant Vanguard finally eyes Bitcoin and crypto ETFs
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