Vanguard And Merrill Lynch Block BTC ETFs

One of the largest investing platforms in the US is refusing customers access to the latest ETFs.

Why does Vanguard hate bitcoin so much?

The approval and launch of Bitcoin spot ETFs this week was a huge development for the crypto sector, but not everyone was cheering. At least two major brokers have barred customers from accessing the new products.

Vanguard and Merrill Lynch have both been heavily criticized for preventing their customers from buying the spot BTC ETFs. Vanguard—one of two dominant players in the US ETF market, the other being BlackRock—previously enabled users to trade GBTC, but upon its conversion to the ETF, now only allow its customers to sell.

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"Investment Philosophy"

In response to customer queries, the platform has stated that the new ETFs "don’t fit with Vanguard’s investment philosophy", and that "high volatility runs counter to our goal of helping investors generate positive real returns over the long term".

Unlike so many other providers, Vanguard has no intention of launching its own ETF, or any other crypto-related products, according to a statement put out by the financial giant.

"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."

Vanguard's founder, Jack Bogle, has previously been highly critical of Bitcoin, warning investors to "avoid it like the plague" in 2017, and expressing sentiments similar to Warren Buffett's.

"Bitcoin has no underlying rate of return. You know bonds have an interest coupon, stocks have earnings and dividends. There is nothing to support bitcoin except the hope that you will sell it to someone for more than you paid for it."

Unsurprisingly, Twitter/X was full of posts from people who voted with their money:

Hypocrisy

Other users were quick to point out Vanguard's hypocrisy, since the platform is happy to list assets from countries with a poor human rights record and still allows trading of other crypto-related products.

In any case, Vanguard is a top 10 owner of MSTR, and owns Bitcoin mining stocks. In the past, they allowed customers to purchase GBTC (which can now only be sold). Moreover, users can still trade BITO, the Bitcoin futures ETF.

While Vanguard's founder does have a track record of hating crypto, something clearly doesn't add up, and there were other explanations for the platform's decision not to allow customers to invest their own money as they choose.


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