Vanguard eyes crypto ETF trading for brokerage clients in epic turnaround
- Vanguard, the world’s second-largest asset manager, is considering offering access to crypto ETFs for its brokerage clients.
- The $10 trillion asset behemoth has begun laying the groundwork, citing growing demand from clients.
- Vanguard had until now taken a conservative approach, staying on the sidelines of the digital asset economy.
Vanguard, the world’s second-largest asset management firm, is reported to be considering allowing its brokerage clients access to cryptocurrency Exchange Traded Funds (ETFs), according to Crypto In America journalist Eleanor Terrett.
Vanguard to let brokerage customers access crypto ETFs
The $10 trillion asset under management mutual fund entity is reportedly quietly preparing to offer access to spot crypto ETFs for brokerage customers, in response to rising demand amid a positively shifting regulatory environment.
According to an anonymous source quoted by Crypto In America, Vanguard is “being very methodical in their approach, understanding the dynamics have been changing since 2024.”
The report adds that the asset management giant has no current plans to launch its own cryptocurrency products, but would allow brokerage clients to access selected spot ETFs. Details regarding the offering remain unknown.
Vanguard’s soft shift toward digital asset products comes at a time when regulators in the United States (US) have eased pressure on the cryptocurrency market, instead, focusing on clear regulations that ensure inclusivity, innovation and customer protection.
The Securities and Exchange Commission (SEC) has recently approved a new listing framework for crypto ETFs, which is likely to lead to an increase in the number of related products in the coming months.
Bitcoin spot ETFs, which launched in January 2024, have a cumulative net inflow of $57 billion, with net assets averaging $144 billion as of Friday. BlackRock’s IBIT ETF is the largest in the US with a cumulative net inflow of $61 billion and total net assets of $84 billion.
On the other hand, Ethereum spot ETFs in the US boast a cumulative total net inflow of $13.27 billion, with net assets averaging $25.59 billion. BlackRock’s ETHA ETF is the largest, with a cumulative net inflow of $13.36 billion and total net assets of $25.59 billion.
Crypto ETF FAQs
An Exchange-Traded Fund (ETF) is an investment vehicle or an index that tracks the price of an underlying asset. ETFs can not only track a single asset, but a group of assets and sectors. For example, a Bitcoin ETF tracks Bitcoin’s price. ETF is a tool used by investors to gain exposure to a certain asset.
Yes. The first Bitcoin futures ETF in the US was approved by the US Securities & Exchange Commission in October 2021. A total of seven Bitcoin futures ETFs have been approved, with more than 20 still waiting for the regulator’s permission. The SEC says that the cryptocurrency industry is new and subject to manipulation, which is why it has been delaying crypto-related futures ETFs for the last few years.
Yes. The SEC approved in January 2024 the listing and trading of several Bitcoin spot Exchange-Traded Funds, opening the door to institutional capital and mainstream investors to trade the main crypto currency. The decision was hailed by the industry as a game changer.
The main advantage of crypto ETFs is the possibility of gaining exposure to a cryptocurrency without ownership, reducing the risk and cost of holding the asset. Other pros are a lower learning curve and higher security for investors since ETFs take charge of securing the underlying asset holdings. As for the main drawbacks, the main one is that as an investor you can’t have direct ownership of the asset, or, as they say in crypto, “not your keys, not your coins.” Other disadvantages are higher costs associated with holding crypto since ETFs charge fees for active management. Finally, even though investing in ETFs reduces the risk of holding an asset, price swings in the underlying cryptocurrency are likely to be reflected in the investment vehicle too.
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