Vanguard and State Street Opt Out of Bitcoin ETF Frenzy
In Brief
Vanguard and State Street are abstaining from the Bitcoin ETF market due to concerns about cryptocurrency’s intrinsic value and volatility.
As the excitement over potential U.S. approvals for spot Bitcoin ETFs reaches its peak, two major players in the exchange-traded fund (ETF) industry, Vanguard Group and State Street Corp., are noticeably absent from the race.
While BlackRock Inc. made headlines with its Bitcoin ETF application, Vanguard and State Street have decisively chosen to stay out of the cryptocurrency ETF market.
Vanguard, renowned for its passive, low-cost ETFs, has made it clear that it has no plans to offer a spot Bitcoin ETF or any crypto-related products. The firm’s stance is rooted in the belief that cryptocurrencies, unlike traditional assets like stocks and bonds, lack intrinsic economic value and do not generate cash flows.
Vanguard emphasizes that the high volatility of cryptocurrencies contradicts their goal of helping investors achieve positive real returns over the long term.
JUST IN: Fidelity's Spot #Bitcoin ETF has been listed on the DTCC under ticker $FBTC. pic.twitter.com/94CbfdNiFg
— drager (@Drager4434) December 8, 2023
Decoding the Drama of Bitcoin ETF Investments
State Street while not as emphatically opposed to the idea of a crypto ETF, remains cautious. The firm, which houses the $57 billion SPDR Gold Shares (GLD) ETF, has stated that it is continuously evaluating its lineup but currently does not offer a crypto ETF.
This approach is noteworthy considering Bitcoin’s comparison to digital gold and the recent parallel movement in the prices of Bitcoin and bullion.
Both Vanguard and State Street have a history of abstaining from hyped investment trends. In 2020, they chose not to participate in the active, non-transparent ETF market, a decision that later seemed prudent as these funds did not meet the initial high expectations.
With the Securities and Exchange Commission (SEC) facing a deadline in early January to announce its decision on Bitcoin ETFs, the industry watches closely.
While some firms eagerly await the possibility of introducing Bitcoin ETFs, Vanguard and State Street’s decision to sit out the race reflects a more conservative and traditional approach to investment products.
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Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master's degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.
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Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master's degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.
