Bitcoin has experienced a notable decline, recently trading around $90,600 after initially reaching approximately $92,000 earlier in the day. This volatility follows a brief surge above $93,000 yesterday, illustrating the ongoing fluctuations in the cryptocurrency market. The pullback aligns with the U.S. Federal Reserve”s recent 25-basis-point rate cut, which brought rates down to a range of 3.50% to 3.75%.
The mixed signals from the Federal Reserve, particularly Fed Chair Jerome Powell”s cautious comments and a divided Federal Open Market Committee (FOMC) vote, have contributed to this market reaction. Analysts have characterized the decline as a “sell the fact” event, suggesting that traders had already anticipated the rate cut.
In a significant move, Vanguard Group has started permitting its clients to trade spot Bitcoin exchange-traded funds (ETFs), thereby expanding access to cryptocurrency products for its investors. However, the firm”s leadership has articulated a skeptical stance regarding the long-term value of Bitcoin and other cryptocurrencies.
At the Bloomberg”s ETFs in Depth conference, John Ameriks, Vanguard”s global head of quantitative equity, remarked that Bitcoin should be viewed more as a speculative collectible rather than a productive asset. He likened it to a viral plush toy, pointing out that Bitcoin lacks essential attributes such as income generation and compounding potential, which are critical for long-term investment decisions.
Ameriks stated, “Absent clear evidence that the underlying technology delivers durable economic value, it”s difficult for me to think about Bitcoin as anything more than a digital Labubu.” This commentary underscores a broader skepticism within traditional financial institutions regarding the intrinsic worth of cryptocurrencies.
Despite these reservations, Vanguard”s decision to include Bitcoin ETFs in its offerings is influenced by the growing acceptance and track record of such products since the launch of the first Bitcoin ETF in January 2024. Ameriks emphasized the importance of ensuring that these ETFs accurately reflect their advertised holdings and perform as expected.
In another development within the financial sector, PNC Bank has emerged as the first major U.S. bank to offer direct spot Bitcoin trading to eligible Private Bank clients, utilizing Coinbase”s Crypto-as-a-Service infrastructure. This advancement follows a strategic partnership established in July and reflects a trend among U.S. banks to incorporate Bitcoin into their wealth management services.
Additionally, the Bank of America has recently advised its wealth management clients to allocate between 1% and 4% of their portfolios to digital assets, indicating a significant shift in the bank”s approach to Bitcoin exposure. Presently, Bitcoin is trading at approximately $90,115.85, with a circulating supply nearing 19.96 million BTC and a market capitalization of $1.81 trillion. The cryptocurrency has shown modest price fluctuations over the past week, mirroring the broader market”s volatility.
