Bitcoin News Today: Vanguard's Crypto U-turn: ETFs Signal Big Shift for the Conservative Giant

Vanguard Group, the world's second-largest asset manager, will begin allowing its 50 million brokerage clients to trade cryptocurrency-linked exchange-traded funds (ETFs) and mutual funds starting Tuesday, marking a significant policy reversal for the firm according to reports. This shift comes after years of resistance to digital assets, as Vanguard previously argued that cryptocurrencies were too volatile and speculative for long-term portfolios. The decision follows the approval of spot Bitcoin ETFs in early 2024, which catalyzed billions in inflows into regulated crypto products, with BlackRock's iShares Bitcoin Trust peaking near $100 billion in assets earlier this year.

The move aligns with growing demand from both retail and institutional investors, as well as the maturation of crypto-backed funds. According to Vanguard's head of brokerage, these ETFs have "performed as designed while maintaining liquidity" during periods of market volatility. The firm will support most crypto ETFs and mutual funds that meet regulatory standards but will not launch its own crypto products or allow funds tied to meme coins according to the firm. This approach mirrors how Vanguard treats other alternative assets like gold, offering clients regulated exposure without direct ownership of the underlying tokens according to analysis.

Vanguard's 50 million clients, who oversee over $11 trillion in assets, will now gain access to ETFs tracking Bitcoin, Ethereum, XRP, and Solana, among others according to the announcement. The firm's decision reflects a broader industry trend, as major asset managers like BlackRock and Fidelity have already embraced crypto ETFs. BlackRock recently increased its internal exposure to its IBIT spot Bitcoin ETF, now holding 2.39 million shares worth $155.8 million. Analysts note that crypto-linked ETFs remain one of the fastest-growing segments in U.S. fund history, even amid recent market corrections.

The policy change coincides with the leadership of Salim Ramji, Vanguard's CEO since July 2024. A former BlackRock executive and blockchain advocate, Ramji has pushed for a more flexible approach to digital assets, contrasting with the firm's previous stance under his predecessor, Tim Buckley according to reports. Vanguard's brokerage platform will now treat crypto ETFs similarly to traditional alternatives, providing clients with a familiar investment vehicle for digital assets. The firm emphasized that it will continue to exclude speculative products but aims to "provide a brokerage trading platform that gives our clients the ability to invest in products they choose" according to the firm.

Bitcoin surged above $86,500 following the announcement, reflecting market optimism about the move according to market data. The inclusion of crypto ETFs on Vanguard's platform could further accelerate institutional adoption, as the firm's scale and low-cost structure attract both retail and institutional investors. Bloomberg ETF analyst Eric Balchunas described the shift as a "big deal," highlighting Vanguard's historical conservatism and the significance of its embrace of crypto products.