As spot bitcoin ETF volumes soar, Vanguard is blocking such trades

Investors using Vanguard’s brokerage platform are not yet able to buy the newly launched slate of US spot bitcoin ETFs.

Rival brokerage firms Fidelity and Charles Schwab, however, are giving investors access to such funds.

Vanguard’s decision to restrict trading of spot bitcoin ETFs comes as combined trading volumes for the ETFs approached $3 billion, after just a few hours on the market.

“While we continuously evaluate our brokerage offer and evaluate new product entries to the market, spot bitcoin ETFs will not be available for purchase on the Vanguard platform,” a spokesperson told Blockworks. “Our perspective is that these products do not align with our offer focused on asset classes such as equities, bonds and cash, which Vanguard views as the building blocks of a well-balanced, long-term investment portfolio.”

Some of the world’s largest financial services companies, such as BlackRock, Fidelity and Invesco, introduced spot bitcoin ETFs on Thursday. In contrast, large ETF players like Vanguard and State Street have never pursued such a fund.

A Vanguard spokesperson told Blockworks earlier this week it had no intent to offer a spot bitcoin ETF or other crypto products.

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“Vanguard believes that the investment case for cryptocurrencies is weak,” the representative added at the time. “Unlike stocks and bonds, most crypto assets lack intrinsic economic value and generate no cash flows. And cryptocurrencies’ high volatility runs counter to our goal of helping investors generate positive real returns over the long term.”

Vanguard’s hesitance to enter the crypto space is not new.

Chief Investment Officer Greg Davis called crypto “more of a speculative asset class” in May 2022. He added at the time that while the firm finds blockchain technology compelling, crypto “doesn’t fit from an investment perspective.”

Ric Edelman, founder of Edelman financial services, as well as the Digital Assets Council of Financial Professionals, previously told Blockworks he expected approved spot bitcoin ETFs to ultimately see widespread availability of spot bitcoin ETFs from most registered investment advisers (RIAs) and brokerage firms.

He added that wirehouses are likely to be slower to offer such funds, as they often wait for the funds to hit certain assets under management levels. Such firms include Morgan Stanley and Merrill Lynch, for example.

Spokespeople for Morgan Stanley and Merrill Lynch did not immediately return a request for comment.

It is more uncommon for discount brokers catering to retail investors to block access to certain funds, however, Edelman said Tuesday.

Brokerage giant Fidelity, which began offering its own spot bitcoin ETF today, allows the trading of all such funds. Though Charles Schwab has not launched a spot bitcoin ETF, it is allowing investors to trade those products on its platform, a spokesperson confirmed.

Edelman called Vanguard’s latest decision “a paternalistic and objectionable position that interferes with investor choice.”

“This will cost Vanguard credibility, and assets,” he told Blockworks. “They will eventually change their mind — and they’ll be late to the party, to their customers’ regret.”

Casey Wagner contributed reporting.

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