Vanguard and State Street Decline Participation in Bitcoin ETF Craze
In Brief
Vanguard and State Street have made the decision to avoid the Bitcoin ETF market due to their concerns regarding the fundamental value and volatility of cryptocurrencies.
As anticipation builds around potential U.S. approvals for Bitcoin ETFs, the participation of some major players in the exchange-traded fund ( Bitcoin ETFs ) sector, particularly Vanguard Group and State Street Corp., remains conspicuously absent from the frenzy. ETF While BlackRock Inc. has been in the limelight with its Bitcoin ETF application,
these two giants have consciously opted to refrain from entering the cryptocurrency ETF space. Vanguard and State Street Vanguard, famous for its low-cost, passive ETFs, is firm in its stance of not launching a spot Bitcoin ETF or any crypto-linked investment products. The company believes that cryptocurrencies do not possess the same intrinsic value as traditional investments like stocks and bonds, and they lack the capability of generating consistent cash flows.
Vanguard stresses that the extreme volatility of cryptocurrencies goes against its mission of guiding investors towards achieving sustainable real returns over extended periods.
An ETF has been made available on the DTCC with the ticker
JUST IN: Fidelity's Spot #Bitcoin Understanding the Nuances of Bitcoin ETF Investments $FBTC . pic.twitter.com/94CbfdNiFg
— drager (@Drager4434) December 8, 2023
State Street, while not overtly dismissive of a cryptocurrency ETF, maintains a cautious outlook. This firm, which manages the $57 billion SPDR Gold Shares (GLD) ETF, has indicated that it is continually reviewing its offerings but is not yet venturing into crypto ETFs.
This cautious strategy stands out, considering Bitcoin's frequent comparisons to digital gold and the recent correlation in price movements between Bitcoin and gold.
Both Vanguard and State Street have a track record of steering clear from overhyped investment fads. Back in 2020, they opted not to engage in the active, non-transparent ETF segment, a prudent choice as those funds did not live up to their initial lofty promises.
As the Securities and Exchange Commission (
) approaches a deadline in early January to reveal its stance on Bitcoin ETFs, the entire industry is closely monitoring the situation. SEC While numerous firms are eager to embrace the prospect of launching Bitcoin ETFs, the decision by Vanguard and State Street to hold back highlights a more traditional and cautious investment philosophy.
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Disclaimer
In line with the Trust Project guidelines Nik is a seasoned analyst and writer at Metaverse Post, providing forward-thinking insights into the rapidly evolving tech landscape, with a focus on AI/ML, XR, VR, on-chain analytics, and blockchain solutions. His articles not only inform but also engage a wide readership, helping them navigate the trailing edge of technological advancements. Armed with a Master’s degree in Economics and Management, Nik possesses a deep understanding of the intricate relationships within the business sphere and its overlap with emerging technologies.
