Why is Bitcoin ETF not listed? Vanguard explains: Immature, speculative asset with no intrinsic value.
Vanguard avoided internet funds in the late 1990s and decided to discontinue leveraged funds, inverse funds, and ETFs in 2019. They will also stop offering most OTC-traded stocks in 2022. Janel Jackson, Global Head of ETF Capital Markets, pointed out that Vanguard made the right decisions in hindsight, benefiting the end-users.
Why doesn’t Vanguard have a Bitcoin ETF?
Is Vanguard planning to launch a Bitcoin ETF?
Why doesn’t Vanguard offer cryptocurrency-related products?
Cryptocurrencies – Immature, lacking intrinsic value and cash flow as speculative assets
Vanguard’s decision to not introduce a Bitcoin ETF sparked discussions, prompting them to release a comprehensive explanation on their official website titled “Why doesn’t Vanguard have a Bitcoin ETF?”
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Is Vanguard planning to launch a Bitcoin ETF?
Janel Jackson, Global Head of ETF Capital Markets, stated:
No, Vanguard takes into consideration various factors including the long-term investment value of assets and meeting client demands. Although there has been an overall increase in discussions about Bitcoin, we currently believe that they do not have a suitable role in a long-term investment portfolio.
He also emphasized that Vanguard is indeed interested in blockchain and actively participates in related technological research, believing it will make the capital markets more efficient.
Why doesn’t Vanguard offer cryptocurrency-related products?
Andrew Kadjeski, Head of Brokerage and Investment Department, pointed out that offering cryptocurrency-related products is easy, but Vanguard’s structure is designed specifically to meet the needs of investors, most of whom are long-term buy-and-hold investors.
Cryptocurrencies – Immature, lacking intrinsic value and cash flow as speculative assets
Janel Jackson cited an article from Morningstar, stating that even a 5% allocation to Bitcoin in a traditional balanced investment portfolio may significantly increase risk, primarily due to Bitcoin’s extreme volatility.
He said:
To Vanguard, cryptocurrencies appear more speculative than investment. Although they are classified as commodities, they are an immature asset class with little historical, intrinsic economic value, and cash flow, and they may severely disrupt investment portfolios.
Vanguard also avoided the internet bubble and inverse ETFs
Janel Jackson and Andrew Kadjeski mentioned that Vanguard also avoided internet funds in the late 1990s and decided to discontinue leveraged funds, inverse funds, and ETFs in 2019. They will stop offering most OTC-traded stocks in 2022.
Vanguard could certainly benefit from these advantages, but they always ask themselves:
Does this meet the long-term needs of investors? In hindsight, in almost all cases, I believe we made the right decisions, benefiting the end-users.
Janel Jackson emphasized that Vanguard’s mission is to provide investors with the best opportunities for investment success. This is not just a slogan, but it is ingrained in their DNA, and not offering a Bitcoin ETF is in line with this mission.
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Further reading
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