“Bitcoin Resembles a Digital Collectible”

John Ameriks, Vanguard’s global head of quantitative equity research, has described Bitcoin as fundamentally speculative in nature. Speaking at Bloomberg’s ETFs in Depth conference in New York, Ameriks compared Bitcoin to a popular collectible plush toy, characterizing it as a “digital Labubu.”

Labubu toys are known for their collectible appeal rather than intrinsic utility. According to Ameriks, Bitcoin’s current valuation shares similar dynamics: demand driven largely by perception, scarcity narratives, and speculative interest rather than conventional financial fundamentals such as cash flows or productive output.

Not Entirely Without Potential

Despite his skepticism, Ameriks stopped short of dismissing Bitcoin outright. He acknowledged that under certain macroeconomic conditions, the cryptocurrency could evolve beyond a purely speculative asset.

In particular, Ameriks pointed to scenarios involving high inflation or political instability, where confidence in fiat currencies weakens. In such environments, alternative stores of value often gain traction, and Bitcoin could find more tangible real-world relevance. While this does not change his current assessment, it leaves room for Bitcoin’s role to expand if global economic conditions deteriorate.

Vanguard’s Carefully Framed Crypto Entry

Ameriks’ comments come shortly after Vanguard implemented a notable policy shift. In December, the firm began allowing clients to trade cryptocurrency exchange-traded funds for the first time. With this move, Vanguard joined peers such as BlackRock and State Street, becoming the last of the three major asset managers to open its platform to crypto-linked investment vehicles.

However, Vanguard has emphasized that access does not equal endorsement. Ameriks made clear that the firm is not offering guidance on whether clients should invest in crypto ETFs, nor advising on which digital assets to hold. The responsibility, he stressed, rests entirely with investors.

Bridging Traditional Finance and Digital Assets

By enabling crypto ETF trading for its more than 50 million clients, Vanguard has effectively expanded the bridge between traditional financial markets and the digital asset ecosystem. Even without direct promotion, the move could channel additional capital into crypto markets, particularly into assets tied to exchange-traded products.

These developments unfold at a time when Bitcoin trades above the $90,000 level and boasts over 16 years of uninterrupted network operation. The contrast between Bitcoin’s market maturity and Vanguard’s restrained stance highlights an ongoing tension: while institutional access continues to grow, deep skepticism about Bitcoin’s intrinsic value remains firmly rooted within traditional finance circles.

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Current Policy and Changing Dynamics

Vanguard had previously banned brokerage clients from buying and selling spot crypto ETFs, labeling cryptocurrencies as a “highly volatile asset class.” However, significant regulatory changes have recently taken place in the U.S.:

• The SEC has adopted new general listing standards to speed up crypto ETF approvals.
• The Trump administration has taken a more flexible stance toward crypto.
• Index funds covering major crypto assets have received the green light.

These developments have prompted Vanguard to reconsider its previously conservative approach.

Vanguard’s Potential Strategy

According to a source familiar with the matter, Vanguard is not currently planning to launch its own crypto ETFs. Instead, the company is weighing whether to allow brokerage clients access to certain third-party crypto ETF products. However, it remains unclear which products would be offered or when a decision might be made.

“Vanguard is proceeding very methodically. They recognize that since 2024, market dynamics have shifted significantly,” the source said.

Growing Competition!

The company’s new CEO, Salim Ramji, previously spent 10 years at BlackRock and was one of the key figures behind the launch of BlackRock’s highly successful Bitcoin ETF, IBIT. Since January 2024, IBIT has seen over $60 billion in net inflows, bringing its total assets above $80 billion. This has sparked the question: “Will Ramji pursue a similar strategy at Vanguard?”

At the Morningstar Investment Conference last July, Ramji reiterated that Vanguard would not be launching its own crypto ETFs. However, he avoided giving a direct answer when asked about providing platform access to third-party crypto ETFs.

Assessment

Vanguard’s move is seen as a signal that the company may enter the crypto market cautiously, but gradually. If brokerage clients are given access to third-party crypto ETFs, it would not only increase investors’ portfolio diversification but also strengthen Vanguard’s competitive position. Nevertheless, it should be remembered that crypto assets inherently carry high risks.

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MicroStrategy’s Growing Appeal

MicroStrategy, which allows companies and individuals hesitant to directly purchase Bitcoin to gain exposure to the cryptocurrency market, is becoming increasingly popular. Recently, the company revealed it had purchased an additional $4.6 billion worth of Bitcoin, sparking further interest in its shares.

Notably, Vanguard, the world’s second-largest asset management company after BlackRock, is among the institutions now investing in MicroStrategy. Despite its previous stance on Bitcoin, Vanguard has acquired MSTR shares. The company manages $9 trillion in assets but had remained cautious about directly involving itself in Bitcoin or offering Bitcoin ETFs to its clients.

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In addition to Vanguard, major banks have also begun purchasing MSTR shares. Morgan Stanley, which had recently given its investment advisors permission to recommend Bitcoin spot ETFs to clients, bought 8 million shares, increasing its holdings by 500% compared to the previous quarter. Other financial giants, including Goldman Sachs (696,000 shares) and Bank of America (766,000 shares), have also added MSTR to their portfolios.

The Bigger Picture

While the total number of MSTR shares held by these institutions is relatively small compared to their overall portfolios (for example, Vanguard holds 800 million shares of Amazon), the trend signals growing institutional interest in Bitcoin exposure through a more traditional, indirect route. MicroStrategy’s stock price has also surged, with its market value now nearing $78 billion.

This shift in attitude towards MicroStrategy and its Bitcoin holdings suggests that even traditional financial institutions are starting to embrace the growing importance of cryptocurrencies in the investment landscape.

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Adhering to Investment Philosophy

“I believe that firms should exhibit consistency in terms of what they stand for and the products and services they offer,” Ramji said. Ramji, who joins Vanguard as the new CIO on July 8, fully supported the arguments made by the firm’s main investment officer, Greg Davis, who previously discussed the firm’s rationale. “I have heard Greg Davis` explanation and I think that is line with Vanguard investment philosophy. Even given the counter logic the investment philosophy is on point”- concluded Ramji.

Industry Reactions and Speculations

Although he was previously the head of BlackRock asset management, which oversaw the launch of the iShares Bitcoin Trust (IBIT) — that, at the moment, is worth $18 billion — Ramji’s style at Vanguard remains conservative. Vanguard’s $8.6 trillion in assets under management outlines a conservative path of views on Bitcoin as a pure speculative commodity being very young and immature.

April 15th, Bloomberg ETF analyst Jim Seyffert’s observation is that it is peculiar for Ramji to launch a Vanguard spot Bitcoin ETF, since according to him, such is improbable. Seyfert in fact pointed to a possible shift in the policy where Vanguard clients would be able to purchase spot Bitcoin ETFs different from Vanguard via the company’s brokerage platform which would be the major but partial policy change.

Customer Pressures and Indirect Exposure

The month of January was a challenge to Vanguard, as some of the investors complained to the company intending to close their accounts because Vanguard’s policies on Bitcoin exchange traded fund were too restrictive. In spite of the indirect exposure from this Bitcoin, it is however not as though the Vanguard does not hold a substantial position in MicroStrategy through its stake, as its company is the second-largest institutional shareholder.

The reluctant wit of the outgoing CEO Tim Buckley back in March saying that Bitcoin ETF belongs to the short-term portfolio due to the highly speculative structure. The sentiment was uttered by Vanguard as a way of restricting investors from what they view as risky investments, whereas sometime back, there was growing pressure and mounting of capitalism within the investment sector.

The post Vanguard’s New CEO Maintains Firm’s Stance Against Bitcoin ETFs appeared first on Coin Engineer.

Potential Shift in Bitcoin Stance

The opinion of the experts in the industry towards the appointment of Ramji’s promotion has industry pundits predicting possible changes in Vanguard’s stance on its long-time opposition to Bitcoin (BTC). Bloomberg ETF analyst James Seyffart said that he did not believe that Ramji could release Vanguard’s own spot Bitcoin ETF product, but he added that Vanguard might change its policy on the banning of clients from the purchase of spot Bitcoin ETFs on its brokerage platform.

Just as before, Balchunas, a Bloomberg analyst, reminded us that Ramji has praised Bitcoin and blockchain technology in the past, and he said, “Maybe the door is more open now, IMO.“ Balchunas put it as a “semi-shock,” that is, Vanguard is bringing in an outsider as the CEO for the first time.

Ramji’s Background and Vision

BlackRock’s Global Head of iShares and Index Investments, Ramji, who at the same time was a member of the firm’s Global Executive Committee, resigned and left the firm to “pursue a new leadership or entrepreneurial opportunity” four days after he helped start the iShares Bitcoin Trust on January 11, 2024. The new position at Vanguard was acquired by president Liz Barrett after the announcement of the retirement of former CEO Tim Buckley in late February.

Customer Reactions and Market Speculation

In January, some of Vanguard’s long-time customers started to threaten to close their accounts when the firm decided not to offer spot Bitcoin ETFs on its broader platform. Vanguard once again confirmed its choice to not invest in Bitcoin, as it did not fit its investment philosophy, which is based on the use of equities, bonds, and cash as the main elements of a balanced and long-term investment portfolio.

Although this is Ramji’s appointment, it means a change of course. GameStop memecoins caught the excitement of the investors, which means that the capital that is not being allocated comes from the investors. Thus, the investment officer of Tyr Capital, Ed Hindi, said, “The excitement generated around GameStop memecoins demonstrates there’s capital out there that’s not being allocated,”  which means that the investor’s interest in Bitcoin and blockchain technology could influence Vanguard.

The post Bitcoin Advocate Salim Ramji Named Vanguard CEO appeared first on Coin Engineer.

However, the firm focused on Bitcoin must meet stringent acceptance criteria and achieve a solid market value increase.

According to the data, on 15th February, following an 8-day trading process, MSTR rose by 46% to rank 535th among the largest public companies in the US.

To join the Standard and Poor’s 500 index, a firm must meet several stringent criteria, such as a minimum market value requirement. In addition, it must have been profitable for the previous four quarters (including the most recent quarter).

At least 250,000 shares must also have been traded in the last six months, and the majority of the shares must be public.

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Under current rules, candidate firms must meet a market value requirement to be eligible. Since MSTR’s market value is $12.1 billion, all other things being equal, it would need to rise from its current price of $718 to $937.

However, even if the criteria are met, the S&P’s 11-member executive committee must approve the listing of MicroStrategy. In May 2022, the committee temporarily removed Tesla from the S&P 500 ESG index.

The broad index fund rebalances every third Friday of March, June, September, and December.

Bitcoin ‘in nearly every’ portfolio (MicroStrategy)

If MicroStrategy embarks on an S&P 500 listing journey and succeeds, this could trigger a “massive positive feedback loop” of Bitcoin exposure in almost every ETF portfolio. If MicroStrategy is included in the S&P 500, Bitcoin will automatically be present in “nearly every” portfolio. This includes traditional 401ks, retirement funds, and any 60:40 portfolio.

The three largest ETFs under asset management, State Street‘s SPY, BlackRock‘s IVV, and Vanguard‘s VOO, each track over $400 billion in assets according to VettaFi‘s ETF database.

If MicroStrategy enters the S&P 500, the portfolio weight would be approximately 0.01% of the index fund.

Data shows that the S&P 500 currently has a market value of $41.9 trillion, which means that with MSTR’s 0.01% weight, it would allocate $12 billion in passive capital.

Rising market cap and TTM profitability could position $MSTR for S&P 500 eligibility, pending U.S. Index Committee approval.

If MSTR is included, it could spark a massive positive feedback loop enabling #bitcoin to begin automatically infiltrating nearly every portfolio. pic.twitter.com/2e4m6oXGJu

— Joe Burnett ()³ (@IIICapital) February 15, 2024

Passive index inflows drive markets. Inclusion brings automatic buying, which raises the share price, enables further share issuance for BTC purchases, and attracts more passive inflows,” it was stated in a separated X post.

MicroStrategy currently owns 190,000 BTC at an average purchase price of $31,224 – which means the company has made a gain of $3.9 billion on its investment.

This comes after the company’s founder and chairman Michael Saylor announced on February 9 that MicroStrategy was turning into a “Bitcoin development company”.

Saylor found the infinite money glitch:

• Buy #Bitcoin
• MSTR goes up
• Take out more debt
• MSTR goes up
• Sell personal holdings
• MSTR goes up
• Issue more stock
• MSTR goes up
• Join the S&P 500
• MSTR goes up

This is the playbook of the century.

— The ₿itcoin Therapist (@TheBTCTherapist) February 15, 2024

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Popular asset management company Vanguard recently announced that it would not offer spot Bitcoin ETFs. Against spot Bitcoin ETFs, he said that high volatility is bad for creating long-term returns. Despite the interest generated with the entry of spot Bitcoin ETFs, Vanguard confirmed that it does not plan to create a service related to crypto.

In a recent interview, Vanguard leaders Janel Jackson and Andrew Kadjesi made statements about the company’s decision.

Janel Jackson stated that Vanguard does not plan to launch a Bitcoin ETF or a service related to crypto, given the current state of cryptocurrencies. Manager Jackson said that they pay attention to many factors, such as the products having lasting investment value and meeting the needs of customers, before offering a service.

Andrew Kadjeski explained that there are many investment options available to investors, such as where to save for retirement, where to invest for their children’s education costs, and where to keep emergency savings.

According to the statements, despite the growing interest in cryptocurrencies, Vanguard does not currently believe that crypto assets are suitable for inclusion in a long-term portfolio. The company believes that cryptocurrencies are more of a speculation than an investment. These reasons lie behind their decision not to offer crypto products.

The post Vanguard Makes New Statements: Crypto Is a Speculation! appeared first on Coin Engineer.