Users of the Vanguard platform threaten to shut down accounts following the firm’s decision to block the capability to buy the spot Bitcoin Exchange-traded funds (ETF). Users lamented that the Spot Bitcoin ETFs were reportedly unavailable for several brokerage platforms.
The move by the asset manager Vanguard to prohibit the acquisition of spot Bitcoin ETF is pushing several of its clients toward the exit.
Vanguard Rules Out Availability of Spot Bitcoin ETFs
The Wall Street Journal (WSJ) publication on Wednesday, January 11, captured the decision by Vanguard not to offer an opportunity to purchase the newly approved spot Bitcoin ETF. The firm prohibited access to its brokerage platform, alleging it failed to align with its traditional offerings.
Vanguard revealed in its statement to the WSJ that spot Bitcoin ETFs are not available for users to purchase on its platform. The publication indicated that the company offers neither Vanguard Bitcoin ETFs nor crypto-related products.
The statement indicated that Vanguard’s perspective considers crypto-related products misaligned with the current offers, focusing on other asset classes, including cash, bonds, and equities. Vanguard believes its asset classes are the building blocks to realizing a well-balanced, long-term investment portfolio.
Vanguard Sowing Distrust in Investors Eyeing Spot Bitcoin ETFs
Vanguard did not apply for the spot Bitcoin ETF that other asset managers applied, led by BlackRock and Fidelity. Investors cite the recent moves as a basis to move funds and consider other platforms that offer access to the newly approved spot Bitcoin ETFs.
A disgruntled Vanguard client, Tony Spencer, decried the decision, labeling it a wrong business move. He admitted that a spokesperson reiterated that Vanguard is not facilitating spot Bitcoin ETFs for acquisition, indicating that the new product contradicts its investment philosophy.
Spencer indicated that Vanguard informed him it would only permit investors to sell Grayscale Investments’s flagship product – Grayscale Bitcoin Trust (GBTC). The GBTC received a nod to convert into the spot Bitcoin ETF.
Coinbase engineering manager Yuga Cohler joined the team and declared they would convert the Roth 401(k) savings within the Vanguard platform to Fidelity, which SEC approved among spot Bitcoin ETFs on Wednesday 10.
Cohler decried the paternalistic prohibition of Bitcoin ETFs that hardly fit within his investment philosophy.
A pro-Bitcoin advocate, Neil Jacobs, confirmed initiating the fund’s transfer from Vanguard, citing the firm’s decision. He labeled Vanguard’s move a terrible business decision.
Clients of various investment firms, including UBS, Edward Jones, Merill Lynch, and Citi, admitted to their inability to acquire spot Bitcoin ETFs on the respective platforms as per the WSJ publication.
UBS platform confirmed exploring the unsolicited offers presented by prospective spot Bitcoin ETF investors from among its customers. UBS revealed assessing the offers on a case basis since the investors indicated that the ETF is available in a brokerage account and suits aggressive investors.
UBS admitted that several of the ten approved spot Bitcoin ETFs are available with its platform.
A Citi executive indicated that Bitcoin is available only for the institutional client base. It admitted that it is exploring products targeting wealthy clients.
JPMorgan Cautious Availing of Spot Bitcoin ETFs
Merril Lynch indicated it is cautiously waiting to ascertain if the spot Bitcoin ETFs approved will trade efficiently. Fox Business’s Eleanor Terret suggested that the discovery of efficiency will constitute sufficient proof of efficiency to facilitate deciding on offering Bitcoin products purchase on its platform.
Elsewhere, JPMorgan’s brokerage platform made the spot Bitcoin ETF trading available. The availability is unsurprising given that BlackRock listed JPMorgan as an authorized participant for its iShares Bitcoin Trust ETF.
Nonetheless, the bank, led by Jamie Dimon, shares a risk disclosure conveyed to the prospective investors considering placing a trade order. The blockchain intelligence firm Messari co-founder Dan McArdle shared screenshots indicating the risk disclosure by JPMorgan.
A review of spot Bitcoin ETF trading following their long-awaited approval on January 10 reveals it topped $4.5 billion. Grayscale, Fidelity, and BlackRock dominated with the largest flows for the Bitcoin ETFs.
With the exemption of Hashdex, other applicants received the S-1 approval alongside their 19b-4 filings. As such, Invesco Galaxy, Valkyrie, and Bitwise join Cathie Wood’s Ark Invest, Wisdom Tree, and Franklin Templeton in offering spot Bitcoin ETF.
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