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Vanguard Still Anti-Bitcoin ETFs Under Incoming CEO Salim Ramji

Last Updated May 16, 2024 9:25 AM
Teuta Franjkovic
Last Updated May 16, 2024 9:25 AM
By Teuta Franjkovic
Verified by Peter Henn

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.

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.

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.

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.

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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