Vanguard Clients Threaten Account Closures as Fund Management Giant Refuses to Sell Spot Bitcoin ETF

Vanguard has blocked customers from buying spot bitcoin exchange-traded funds (ETFs) on its platform, and now some customers are threatening to move their funds to competitors.

The asset manager, with total assets of $7.2 trillion, the world's second-largest after BlackRock, said it has no plans to offer a bitcoin ETF or allow clients to buy the product on its platform.

The company told the Journal that the investment product was inconsistent with its focus on "asset classes such as stocks, bonds and cash, which Vanguard views as the cornerstones of building a balanced long-term portfolio."

The move sparked criticism from customers, with Tony Spencer saying on Twitter that a spokesman for the company told him he couldn't buy the product because it didn't align with his investment philosophy.

Coinbase engineer Yuga Cohler said he would move eight years of his 401K savings from Vanguard to Fidelity. Cohler condemned Vanguard's blocking of a Bitcoin ETF, calling it "paternalistic."

Blocking Bitcoin ETFs shows Wall Street’s skepticism about cryptocurrencies

“Crypto skepticism remains on Wall Street,” Fox Business reporter Eleanor Terett said in response to Vanguard’s move to block a Bitcoin ETF.

Despite launching its own Bitcoin ETF, Fidelity issued a disclaimer to users attempting to purchase the stock, reminding them that the ETF is subject to a “designated investment agreement.” Users must acknowledge that they are experienced investors with a high risk tolerance.

JPMorgan also warned clients who want to buy BlackRock’s iShares Bitcoin Trust (IBIT) ETF that the asset is a high-risk asset. JPMorgan is an approved participant in BlackRock’s IBIT ETF.

Despite Vanguard’s exit, spot Bitcoin ETF trading was strong on January 11, with volume reaching $4.6 billion, of which BlackRock earned more than $1 billion.

Also Read
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Ethereum Price Rises as Hopes of Bitcoin ETF Breakout Open Doors for ETH ETF
SEC approves Bitcoin ETF, but Gary Gensler makes it clear his war on crypto is not over

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