Vanguard, a $10 trillion asset management giant known for being cautious, is quietly preparing securities clients to purchase funds (ETFs) traded on digital asset exchanges.
This is a big deal for the world’s second largest asset manager who has been opposed to Bitcoin products for many years.
Vanguard has been opposed to Bitcoin ETFs since its launch in 2024. Fidelity and BlackRock have launched the highly successful Bitcoin ETF, the Fidelity Wise Origin Bitcoin Fund (FBTC), and the Ishares Bitcoin Trust (IBIT).
Not only did Vanguard choose to launch its own Bitcoin ETF, it also blocked its brokerage clients from purchasing spot Bitcoin ETFs from other funds when it first came out, citing volatility and long-term returns.
Related: Vanguard Bitcoin ETF Rejection: Why is it wrong?
However, client demand and a more favorable regulatory environment seem to encourage companies to change their stance.
“They are very well-ordered in their approach. Understand that dynamics have been changing since 2024.” A source familiar with Vanguard’s plans told Crypto in the US.
According to multiple reports, the company has laying the foundations and talking to external partners about enabling clients to purchase selected third-party digital asset ETFs on the brokerage platform.
However, Vanguard is not yet expected to launch its own Bitcoin product. Instead, they follow Schwab’s model by providing access to ETFs managed by others.
Much of the speculation about Vanguard’s shift has been around CEO Salim Ramji. As a former BlackRock executive, Ramji helped launch IBIT. It has become one of the most successful ETFs in history, managing over $80 billion in assets under management.
He took over at Vanguard in mid-2024, and many expected the company’s attitude towards Bitcoin to be softened.
At a meeting earlier this year, Ramji emphasized that Vanguard will not create its own digital asset ETF. However, he dodged a question about whether clients could purchase third-party products through brokerage platforms.
It was enough to start chatting on Wall Street. Bloomberg analyst Eric Balknas summed it up on social media: “Vanguard is considering ending the Bitcoin ETF ban (aka bends the knees lol), which I also heard chatter.
Vanguard is rethinking that stance for several reasons. Analysts believe the first one is in client demand.
With over 50 million investors, Vanguard faces a backlash from some customers who have had to move their assets elsewhere to be exposed to Bitcoin. Provide ETFs help retain clients and prevent leaks to competitors.
The second is regulations. Since 2024, US regulators have become Bitcoin-friendly.
The SEC recently approved new listing standards that fast track ETF applications, and the SEC and CFTC are working together to harmonize digital asset rules. The clarity of the regulations reduced the risk of traditional financial companies entering the space.
Third, the success of Bitcoin ETFs is difficult to ignore. Spot Bitcoin ETF has been holding over 1,300,000 BTC together, attracting more than $140 billion inflows since its launch. That level of institutional interest made Bitcoin impossible for Vanguard to ignore.