In a significant change of direction, Vanguard has announced it will begin allowing the trading of cryptocurrency-focused exchange-traded funds (ETFs) and mutual funds on its brokerage platform. This decision ends years of resistance to digital asset products, reflecting a growing recognition of the demand for cryptocurrency investments.
Starting Tuesday, clients will be able to trade funds that hold Bitcoin, Ethereum, XRP, and Solana. This move aligns crypto investment opportunities with other non-core assets that Vanguard already supports, such as gold, as reported by Bloomberg.
This pivot opens the door for over 50 million brokerage customers to access regulated crypto investment vehicles throughout the U.S. fund industry. The decision comes after months of internal review and is noteworthy given the sustained interest in digital assets, even amidst a broader market downturn.
Vanguard”s prior reluctance to engage with the rapidly expanding market for spot U.S. Bitcoin ETFs left the firm on the sidelines as the total assets in these funds surged from $25 billion in early 2024 to approximately $119 billion. This growth was driven by the influx of capital into nearly 10 spot Bitcoin ETFs that launched earlier this year.
Among these funds, BlackRock“s iShares Bitcoin Trust stands out as the largest, currently managing around $70 billion, down from a peak of nearly $99.5 billion, according to data from SoSovalue. While crypto investments constitute a small portion of BlackRock”s total $13.5 trillion in assets under management, Vanguard itself manages roughly $1.5 trillion.
Leadership changes at Vanguard have contributed to this shift. Last July, Salim Ramji became the CEO, marking a departure from the previous leadership, which was less favorable to cryptocurrencies. Ramji, who previously held a prominent role at BlackRock overseeing iShares and Index Investments, has been more open about his support for both Bitcoin and blockchain technology.
Interestingly, this is the first time Vanguard has hired externally for its top executive position, a move that surprised many analysts, including Bloomberg ETF analyst Eric Balchunas, who noted the significance of this hiring decision earlier this year.
As Vanguard embraces digital assets, the landscape of cryptocurrency investment is shifting, potentially influencing more traditional financial institutions to reconsider their positions on blockchain and cryptocurrencies.
