Vanguard CEO Reiterates Firm Won’t Compete in the Crypto ETF Market

Crypto Reporter

Shalini Nagarajan

Crypto Reporter

Shalini Nagarajan

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Shalini is a crypto reporter who provides in-depth reports on daily developments and regulatory shifts in the cryptocurrency sector.

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August 15, 2024 01:00 EDT

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Vanguard, ranked as the second-largest ETF provider, has no intention of joining the crypto ETF market.

Salim Ramji, its new CEO, told ETF.com in an interview published Wednesday that he does not intend to emulate industry rivals.

“It’s important that a company stay consistent with who they are,” he said. “Vanguard must look through the lens of our clients. But I want more innovation.”

Vanguard Opts Out of Crypto ETFs, Sticking to Low-Cost Investment Strategy

Vanguard ranks as one of the top ETF issuers worldwide, overseeing more than $7 trillion in assets. Although BlackRock’s iShares and State Street’s SPDR ETFs may dominate the ETF market to a greater extent, Vanguard remains a significant player, particularly within the US.

Ramji referenced Jack Bogle’s “cost matters hypothesis” to explain why Vanguard won’t introduce crypto ETFs. This theory posits that investment costs like fees, trading expenses, and taxes greatly affect long-term returns, suggesting that reducing these costs can enhance investment outcomes over time.

While Crypto ETFs Succeed, Vanguard Decides Against Participation

Prominent issuers of crypto ETFs like BlackRock, Grayscale, VanEck, Bitwise, Fidelity, WisdomTree, and Valkyrie have seen significant success with their spot Bitcoin ETFs, amassing $10b in trading volume within the first three days, outstripping the total volume of all 500 ETFs launched in 2023. This rapid adoption by major wealth managers has not only validated cryptocurrencies as an investment asset but also broadened its accessibility.

Ramji, previously at the helm of BlackRock’s iShares and index investments, managed over 1,400 ETFs at the investment firm. He oversaw BlackRock’s spot Bitcoin ETF launch for retail investors, which swiftly became the largest Bitcoin fund globally.

Appointed as Vanguard’s CEO on July 8, Ramji has continued Vanguard’s stance of not planning to introduce a spot Bitcoin ETF, despite the industry’s excitement over these new financial products.