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Vanguard Still Anti-Bitcoin ETFs Under Incoming CEO Salim Ramji

Published May 16, 2024 9:25 AM

Salim Ramji Reaffirms Vanguard's Negative Stance Towards Spot Bitcoin ETFs. | Credit: Patrick McMullan/Patrick McMullan via Getty Images

Key Takeaways

Newly appointed CEO Salim Ramji has confirmed that Vanguard will not introduce a spot Bitcoin ETF.
Despite launching a Bitcoin ETF at BlackRock, Ramji prioritizes firm’s philosophy over his personal interest in crypto.
Vanguard remains focused on traditional asset classes, resisting the rising investor demand for cryptocurrency.

Salim Ramji, the incoming CEO of Vanguard and former leader of Blackrock’s global ETF business, has reiterated the company’s decision not to launch a spot Bitcoin exchange-traded fund (ETF).

Despite his previous success in launching a similar ETF at Blackrock, Ramji supports Vanguard’s view of crypto. The company sees it as a “speculative and immature asset class”. Ramji now says crypto-related investment products do not fit with Vanguard’s philosophy.

New Vanguard CEO Salim Ramji Rules Out Bitcoin ETF – For Now

In an interview with Barron’s published on May 15, Ramji, said that Vanguard’s commitment to consistency rules out crypto-related investment products.

🚨NEW: @Vanguard_Group , the world’s second largest asset manager behind @BlackRock , is reportedly blocking its customers from buying into the new $BTC Spot ETFs, saying the products “don’t fit with Vanguard’s investment philosophy.”

Now we’ll start to see how institutional… https://t.co/LmZodeYyad

— Eleanor Terrett (@EleanorTerrett) January 11, 2024

Ramji, who will take over as Vanguard’s CEO on July 8, emphasized the importance of firms maintaining consistency in their values and the products and services they offer.

He stated :

“I think it’s important for firms to have consistency in terms of what they stand for and the products and services they offer. I have heard [chief investment officer] Greg Davis’ explanation. I think it is entirely consistent with Vanguard’s investment philosophy. It is a logical and consistent point of view.”

Will Vanguard Some Day Embrace Bitcoin Under Ramji’s Leadership?

Ramji managed the launch of BlackRock’s spot Bitcoin ETF, the iShares Bitcoin Trust (IBIT), in January. Since then, it has accumulated $18 billion in assets under management. His interest in cryptocurrency led to much speculation about potential changes he might bring to Vanguard after his move there.

While BlackRock and competitors like Fidelity, along with nine other investment managers, have successfully launched spot Bitcoin funds attracting over $12 billion in net inflows, Vanguard has taken a different stance.

VERY IMPRESSED.

Fidelity is LIGHT YEARS ahead of Vanguard.

TODAY, they’re calling existing customers already exposed to bitcoin-related securities (like mining stocks, etc.) to address any questions about the Bitcoin ETFs.

That is how you treat customers. #Bitcoin pic.twitter.com/hS04YO0IvJ

— Neil Jacobs (@NeilJacobs) January 12, 2024

With its $8.6 trillion in assets under management, Vanguard has refrained from launching a Bitcoin ETF. This is because it sees crypto as a “speculative” investment and an “immature” asset class.

Bloomberg ETF analyst James Seyffart said on May 15 that he does not believe Ramji will introduce a Vanguard spot Bitcoin ETF. However, he suggested Ramji might reconsider the firm’s current stance of not permitting its clients to purchase other spot Bitcoin ETFs on its brokerage platform.

Still think it’s unlikely that this means vanguard launches a #Bitcoin ETF (at least near term). But I think Salim could reverse Vanguard’s stance on not allowing their clients to buy spot Bitcoin ETFs on their brokerage platform 👀 https://t.co/ZMDKM1Uy6Q

— James Seyffart (@JSeyff) May 14, 2024

Investor Demand for Bitcoin ETFs Soars: Will Vanguard Miss the Boat?

In March, outgoing Vanguard CEO Tim Buckley said he did not view a Bitcoin ETF as suitable for a long-term retirement portfolio due to its speculative nature. His comments came during pressure from customers following the launch of Bitcoin ETFs by competing firms.

In response, in January, numerous Vanguard clients threatened to close their accounts because the firm restricted access to spot Bitcoin ETFs. Despite this, Vanguard has an indirect exposure to Bitcoin through its substantial investment in MicroStrategy. Indeed, it is the second-largest institutional shareholder in Michael Saylor’s company.

I have 8 years worth of 401K savings at @Vanguard_Group from my time as an employee at Google.

I will be rolling over these funds to @Fidelity .

Vanguard's paternalistic blocking of Bitcoin ETFs does not fit in with my investment philosophy. https://t.co/eKmgo0xK5h

— yuga.eth 🛡 (@yugacohler) January 11, 2024

Meanwhile, rival investment firms have experienced a resurgence in investor interest. This follows Bitcoin’s 7% increase to $66,000 on May 16.

Preliminary data from Farside Investors shows that on May 15, net inflows into almost every US spot Bitcoin ETFs surpassed $300 million. BlackRock’s IBIT, which had yet to report its results, was the exception.

Morgan Stanley is considering a significant expansion in its Bitcoin ETF offerings. It could, potentially, allow its 15,000 brokers to actively recommend these products to clients. Currently, Morgan Stanley provides Bitcoin ETFs only on an unsolicited basis, requiring clients to start discussions with their advisors if they are interested in them.

Meanwhile, LPL Financial , the largest independent brokerage in the US with over 22,000 brokers, announced plans in February to assess which Bitcoin funds to potentially include in its offerings to clients.

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About the Author

Teuta Franjkovic

Teuta is a seasoned writer and editor with more than 15 years of experience. She has expertise in covering macroeconomics and technology as well as the cryptocurrency and blockchain industries. She has worked for several publications as a journalist and editor, including Forbes, Bloomberg, CoinTelegraph, Coin Rivet, CoinSpeaker, VRWorld and Arcane Bear. Teuta began her professional career in 2005, working as a lifestyle writer at Cosmopolitan in Croatia. From there, she branched out to several other publications, covering mainly business and the economy. She then turned her attention to the world of cryptocurrency and blockchain, believing that crypto is among the most important inventions in the history of humanity. Her involvement in fintech began in 2014 and she has since lent her expertise in writing, editing and gathering information about the world of crypto, blockchain, NFTs and Web3. An all-round news hound, mentor, editor, and writer, Teuta enjoys teamwork and good communication. She holds a WSET2 diploma and has a thing for chablis, punkrock music and shoes. She also holds a double MA in Political science and Entrepreneurship.

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