Janel Jackson, Vanguard’s Global Director of Capital Markets, elaborated on the firm’s position regarding digital assets. She stated that while Bitcoin is classified as a commodity, it remains an immature asset class. Jackson pointed out that Bitcoin lacks a substantial track record, intrinsic economic value, consistent cash flow, and poses potential risks to investment portfolios.
Considering the current state of the cryptocurrency market, Vanguard has decided not to introduce a Bitcoin ETF or any other cryptocurrency-related product. The firm follows a strict decision-making process when it comes to new investment opportunities, with a focus on long-term investment benefits. Jackson emphasized that Vanguard does not believe Bitcoin and cryptocurrencies are suitable for inclusion in long-term portfolios.
Andrew Kadjeski, Vanguard’s Director of Brokerage and Investments, stressed that the majority of Vanguard’s investor base consists of long-term investors. Even if clients had easy access to cryptocurrency products, offering them would contradict Vanguard’s mission to serve the best interests of long-term investors.
However, many of Vanguard’s clients have expressed disappointment with the firm’s emphasis on traditional asset classes such as stocks, bonds, and cash. Industry experts have also noted that Vanguard’s stance on Bitcoin ETFs goes against the current market trend, as more investors are seeking exposure to digital assets.
It is worth mentioning that last year Vanguard Group increased its investments in bitcoin mining companies to over $500 million. Additionally, in 2020, Vanguard successfully tested a blockchain-based securities settlement system.