Vanguard Group’s CEO, Tim Buckley, has confirmed that the asset management giant will not pursue Bitcoin Exchange-Traded Funds (ETFs), distinguishing itself from competitors like BlackRock and Fidelity. The company cites Bitcoin’s lack of intrinsic value, cash flow, and stability as reasons for its decision.
According to its CEO, Tim Buckley, Vanguard Group, one of the world’s largest asset managers, has ruled out launching any Bitcoin or cryptocurrency ETFs.
In an interview with CNBC on November 8, 2023, Buckley said that Vanguard focuses on asset classes suitable for long-term portfolios and that Bitcoin does not fit within that framework.
Buckley’s statement contrasts with the recent moves by other major asset managers, such as BlackRock and Fidelity, which have announced proposals for Bitcoin spot ETFs.
A spot ETF is a type of fund that tracks the price of an underlying asset, such as Bitcoin, and allows investors to buy and sell shares of the fund on a stock exchange.
Bitcoin ETFs face regulatory hurdles
The prospects of a Bitcoin spot ETF in the US market have been uncertain, as the Securities and Exchange Commission (SEC) has expressed skepticism and concerns about the cryptocurrency sector.
The SEC has rejected several applications for Bitcoin spot ETFs in the past while allowing Bitcoin futures ETFs, which are based on contracts that bet on the future price of Bitcoin.
However, some analysts and industry players have expressed optimism that the regulatory environment may change in favor of Bitcoin spot ETFs, especially after a recent legal victory by Grayscale Investments, the largest digital asset manager, against the SEC.
The court ruling suggested that the SEC may not have the authority to regulate some types of cryptocurrency products, such as Grayscale’s Bitcoin Trust, which could pave the way for a spot Bitcoin ETF.
Market demand for crypto products grows
Despite the regulatory challenges, the market demand for cryptocurrency products has been increasing as more investors seek exposure to the emerging asset class.
According to a report by CoinShares, a digital asset research firm, the inflows into digital asset funds reached $1.2 billion in the week ending November 5, 2023, the highest weekly level since July 2022.
The report also noted that Bitcoin accounted for 70% of the inflows, followed by Ethereum with 21%.
The fact that the Vanguard Group Bitcoin ETF is not launching underscores the ongoing debate over the role of cryptocurrencies in traditional investment portfolios, as well as the evolving regulatory landscape surrounding these assets.
