In a major reversal from a year ago, the world’s second-largest asset manager says it will now allow crypto ETFs and mutual funds to be traded on its platform. As reported by Bloomberg, Vanguard is responding to pressure from retail and institutional clients citing changes that the crypto market “has matured” and “investor preference continues to evolve.”
The significance? $11 Trillion
This is a major development and yet another signal of traditional finance embracing this once frowned upon sector: Vangaurd manages over $11 trillion in assets and services some 50 million brokerage customers, who up until today could not gain exposure to the cryptocurrency sector through their manager.
“Cryptocurrency ETFs and mutual funds have been tested through periods of market volatility, performing as designed while maintaining liquidity,” said Andrew Kadjeski, head of brokerage and investments at Vanguard. “The administrative processes to service these types of funds have matured, and investor preferences continue to evolve.”
As the CEO of the crypto research firm 51Insights stated on the reversal of this conservative asset manager that for years blocked customers from buying Bitcoin:
“For years, Vanguard was the ‘anti-crypto’ giant. They blocked customers from buying spot Bitcoin ETFs. They claimed digital assets had ‘no intrinsic value.’ [But] they watched clients leave to get exposure elsewhere… Vanguard watched its biggest rival, BlackRock, rake in ~$70 billion in assets with its IBIT ETF alone…
When the most risk-averse asset manager in the world opens the gates to Solana and XRP, the ‘reputation risk’ argument is officially dead. The floodgates for conservative money just opened.”