Spot Bitcoin ETFs were reportedly unavailable for purchase on the brokerage platforms of Citi, Merill Lynch, Edward Jones, and UBS.
The apparent decision by asset manager Vanguard to not allow the purchase of spot Bitcoin exchange-traded funds (ETF) on its platform appears to have motivated some customers to consider leaving.
According to a report from The Wall Street Journal on January 11th, Vanguard stated that it will not be providing the new spot Bitcoin ETFs on its brokerage platform due to a misalignment with its conventional offerings.
"Spot bitcoin ETFs will not be available for purchase on the Vanguard platform,” said the company in a statement to the WSJ. “We also have no plans to offer Vanguard bitcoin ETFs or other crypto-related products.”
"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 did not apply for a spot Bitcoin ETF among the 14 issuers last year, and as a result, some investors view recent developments as an incentive to transfer their funds to alternative platforms.
One apparent Vanguard customer, Tony Spencer claims a spokesperson told him that Vanguard isn’t allowing spot Bitcoin ETFs for purchase because the product “doesn’t fit with Vanguard’s investment philosophy.”
Additionally, Spencer alleges that Vanguard only permits investors to sell Grayscale's prominent Bitcoin product, GBTC, which was recently transformed into a spot ETF.
🚨NEW: @Vanguard_Group, the world’s second largest asset manager behind @BlackRock, is reportedly blocking its customers from buying into the new $BTC Spot ETFs, saying the products “don’t fit with Vanguard’s investment philosophy.”
Now we’ll start to see how institutional… https://t.co/LmZodeYyad— Eleanor Terrett (@EleanorTerrett) January 11, 2024Sponsored Business Content
Yuga Cohler, Coinbase's senior engineering manager, along with others, announced their intention to convert their Roth 401(k) savings from Vanguard to Fidelity. Fidelity happens to be one of the issuers of the 10 spot Bitcoin ETFs that were launched on January 11th.
“Vanguard's paternalistic blocking of Bitcoin ETFs does not fit in with my investment philosophy,” Cohler added.
Neil Jacobs, a Bitcoin commentator, stated that he is currently in the process of moving his funds out of Vanguard in reaction to the reported decision. He expressed his view that Vanguard's choice was a 'terrible business decision.'
According to The Wall Street Journal, clients from investment firms Citi, Merrill Lynch, Edward Jones, and UBS have reported being unable to purchase spot Bitcoin ETFs on their respective platforms. Cointelegraph reached out to these firms for comment but has yet to receive a response.
According to Fox Business reporter Eleanor Terrett, Merrill Lynch is reportedly waiting to assess the efficiency of spot Bitcoin ETFs trading before making a decision on whether to offer the purchase of Bitcoin products. The information was sourced from an unnamed individual.
In the meantime, trading of spot Bitcoin ETFs was available on JPMorgan's brokerage platform. It's worth noting that JPMorgan is an authorized participant of BlackRock's IBIT product. However, screenshots shared by Dan McArdle, co-founder of blockchain intelligence platform Messari, indicate that JPMorgan, led by Jamie Dimon, has provided a risk disclosure to potential investors who are considering placing a trade order.
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