Vanguard Bends the Knee, Lists Spot Crypto ETFs

Vanguard, one of the world’s largest asset managers, has reversed its cautious stance on cryptocurrencies. Starting Tuesday, December 2nd, clients will be able to trade crypto ETFs and mutual funds on its platform. The move gives Vanguard’s 50 million users access to regulated crypto products, including those offered by competitors like BlackRock.

The firm had previously avoided crypto-related funds due to concerns over volatility and regulatory uncertainty. However, rising client demand since the approval of spot bitcoin ETFs in January 2024 appears to have prompted the shift.

Vanguard Opens Platform to Regulated Crypto Funds

Andrew Kadjeski, head of Vanguard’s brokerage and investments, told Bloomberg that crypto ETFs and mutual funds have proven resilient through periods of market volatility. He added that the operational processes to manage these funds are now more mature, while client preferences continue to evolve.

Vanguard said it will support most crypto ETFs and mutual funds that meet regulatory standards. This approach is similar to how the firm treats gold and other alternative assets. Products tied to memecoins or lacking regulatory approval will remain off-limits.

The firm also clarified that it currently has no plans to create its own crypto funds. Instead, it will focus on offering existing regulated products, maintaining a cautious approach despite growing market interest.

Spot Crypto ETFs on the Rise

Crypto-linked ETFs remain among the fastest-growing segments in the U.S. fund industry, even after recent market pullbacks. Analysts say this growth highlights strong demand for regulated ways to access digital assets through traditional platforms.

The surge in new offerings is exemplified by Grayscale’s Chainlink Trust, which is set to convert into a fully tradable spot ETF this week. Notably, this marks the market’s first spot LINK ETF. Listing on NYSE Arca will allow investors to access Chainlink via traditional brokerage accounts in a regulated format.

On November 24, Grayscale also introduced a Dogecoin ETF (GDOG) and an XRP ETF (GXRP). Bloomberg analyst Eric Balchunas predicts that more than 100 spot crypto ETFs could launch in the next six months, signaling rapid expansion in the sector.

Vanguard’s move highlights a significant policy reversal and reflects a broader trend of integrating digital assets into conventional investment platforms. It underscores growing mainstream acceptance of cryptocurrencies under regulatory oversight.

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