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Pouring water on Bitcoin

Portfolio > ETFs

Vanguard Blocks Spot Bitcoin ETFs From Its Trading Platform

By Dinah Wisenberg Brin

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What You Need to Know

  • The new funds don't align with Vanguard's focus, the company says.
  • Merrill and UBS and confirmed they were making spot bitcoin ETFs available to certain clients; Wells Fargo says they're on its WellsTrade platform.
  • Dennis Kelleher of Better Markets cheered Vanguard's decision.

Investors won’t be able to buy the newly approved spot bitcoin ETFs through Vanguard Group, a spokesperson confirmed Thursday, saying the products don’t fit with the fund giant’s focus.

Social media users indicated Merrill Lynch also was prohibiting customers from investing in the new funds Thursday, when the ETFs started trading; a Merrill spokesperson indicated Friday, however, that the company would open access for certain clients later in the day.

The Securities and Exchange Commission made a landmark decision this week to approve the country’s first 11 ETFs investing in bitcoin. Fidelity, BlackRock, Franklin Templeton, ARK Investment Management, WisdomTree and Grayscale are among the firms offering the new ETFs.

Vanguard, in contrast, didn’t pursue permission to market a spot bitcoin ETF. 

“While we continuously evaluate our brokerage offer and evaluate new product entries to the market, spot Bitcoin ETFs will not be available for purchase on the Vanguard platform. We also have no plans to offer Vanguard Bitcoin ETFs or other crypto-related products,” a spokeswoman told ThinkAdvison via email Thursday.

“Our perspective is that these products do not align with our offer focused on asset classes such as equities, bonds and cash, which Vanguard views as the building blocks of a well-balanced, long-term investment portfolio,” the spokesperson added.

Crypto enthusiasts on X criticized Vanguard’s position, with some customers indicating they were taking their business and money elsewhere. ETF experts weighed in as well.

“Vanguard banning all bitcoin ETFs from their platform,” Eric Balchunas, Bloomberg senior ETF analyst, posted on X.

“While Vanguard has diverged from their Bogle DNA in some ways,” they’re on same page about bitcoin, which the late Vanguard founder John C. Bogle in 2017 said to avoid “like the plague,” Balchunas added, displaying a text excerpt quoting Bogle as saying it was “crazy” to invest in bitcoin.

Balchunas also shared a comic panel from another X user showing Vanguard keeping a customer from investing in spot bitcoin ETFs.

“But have all the leveraged index products you want!” Douglas Boneparth, Bone Fide Wealth president, responded, with a laughing emoji.

Vanguard customers eager to invest in the spot bitcoin ETFs appeared set to take their money elsewhere.

“I was so mad this morning. I had both mine and my wife’s roth ready to go this morning. All in settlement funds only to not be able to invest. Promptly transferred to Fidelity. Will take 10 days to finish the transfer. Uggg,” an account called Bitcoin Bob, @beeforceone, posted on X.

Better Markets, an advocacy group that supports increasing market regulation, applauded Vanguard’s position.

“Bravo Vanguard! One of the biggest and most well-known fund issuers and money managers in the world is to be commended for putting its investors’ best interest first,” Dennis M. Kelleher, the group’s co-founder, president, and CEO said in a statement.

“In doing so, it is withstanding enormous competitive pressures and foregoing quick, easy and large predatory profits, all for the good of its customers. That takes integrity and proves again why Vanguard is one of the most respected and trusted financial firms in the country.”

Crypto enthusiasts on X, meanwhile, also took aim at Merrill Lynch.

“Vanguard and Merrill Lynch not embracing Bitcoin remind me a lot of Toys R Us and Sears who wouldn’t embrace the Amazon retail model. Good thing there are plenty of options,” someone with the moniker Crypto Hipster posted with a GIF flashing old Sears photos.

A Merrill representative told ThinkAdvisor by email Friday, however: “We are finishing up our evaluation and we plan to begin allowing access later today to eligible clients.” The spokesperson later confirmed that eligible clients are those with at least $10 million in assets.

A source close to UBS, confirming a Bloomberg report, said Friday the company was making some spot bitcoin ETFs available to certain wealth management clients on an unsolicited basis. Among the conditions, the client must request the purchase; the advisor can’t suggest it. Purchases must be made from a brokerage account, and the client must meet a minimum threshold for assets invested at the firm.

Wells Fargo provided the following statement to ThinkAdvisor on Friday: “Spot bitcoin ETFs are available for unsolicited purchases through an advisor with Wells Fargo Advisors or through our online WellsTrade platform.”

Image: Adobe Stock

Dinah Wisenberg Brin

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