Vanguard Faces Community Backlash as it Turns Down Listing for Ethereum ETFs
Vanguard Group, a prominent investment advisor in the United States with approximately $7.7 trillion in assets under management, is facing significant backlash for its refusal to allow spot Ethereum ETFs on its platform, despite the recent approval of 19b-4 proposals by the Securities and Exchange Commission (SEC) for exchanges to list these funds.
Senior crypto analyst Eric Balchunas criticizes Vanguard’s cautious approach, stating that the company claims these ETFs are not aligned with their objective of building a well-balanced, long-term portfolio. Balchunas finds this ban overly cautious and compares it to a “Nanny role.” He believes that Vanguard’s investors, whom he considers to be the smartest money on the planet, are capable of making informed decisions and should have more investment choices.
Balchunas notes that Vanguard stands out from its peers due to its operational model, which is more like a cooperative. The company has consistently generated nearly a billion dollars daily for over a decade without chasing high-performing ETFs. While this approach has proven stable, it may contribute to Vanguard’s conservative stance on Ethereum.
Despite not allowing spot Bitcoin ETFs on its platform earlier this year, Vanguard’s competitors, such as Fidelity and Charles Schwab, offer these products. Even BlackRock, one of Vanguard’s main rivals, has a Bitcoin fund with nearly $20 billion in assets. However, there is hope for crypto enthusiasts as Vanguard’s new CEO, Salim Ramji, who previously worked at BlackRock and was instrumental in launching their Bitcoin ETF, could potentially influence the company’s future decisions regarding crypto assets.
The question arises as to whether Ramji’s experience and interest in crypto could prompt Vanguard to reconsider its traditional policies. However, Vanguard’s exclusion of spot Ethereum ETFs highlights the ongoing tension between traditional investment strategies and the emerging cryptocurrency market.