Vanguard on Tuesday for the first time started letting clients buy crypto exchange-traded funds managed by third parties — just in time for a bounce in the beleaguered digital asset.
The news, first reported by Bloomberg, was confirmed by Vanguard on Tuesday. The company noted that its clients could buy products like BlackRock’s iShares Bitcoin Trust ETF other third-party cryptocurrency ETFs and mutual funds for purchase through its brokerage platform.
ETFs tied to other cryptos, including ethereum and Ripple, were also available.
The Bloomberg report quoted Vanguard’s head of brokerage and investments as saying crypto ETFs and mutual funds have performed as designed through periods of market volatility.
The Malvern, Pa.-based company said Tuesday it still has no plans to manage its own crypto products, but aims to provide a brokerage trading platform that gives clients the ability to invest in products they choose.
“Naturally, that could accelerate the further legitimization of crypto as part of diversified portfolios,” said Hunter Rogers, co-founder of global bitcoin yield protocol TeraHash, while noting that Vanguard previously called crypto speculative and ill-suited for long-term portfolios.
Growing demand for digital assets likely was the catalyst for Vanguard to step in, Rogers said.
Bitcoin was up about 6.2% on Tuesday to top $91,000, as risk appetite returned. Yet the lead cryptocurrency had slumped 31% from its record high in October.
Crypto ETFs raked in funds, as many new investors were piling into bitcoin during its march toward its Oct. 6 record high of $126,272.76 a coin. Large inflows in recent months, however, also unleashed significant outflows.
Of note, the average cost basis for U.S. spot bitcoin ETFs since their launch in January 2024 was pegged around $84,000, according to Jim Ferraioli, director of crypto research and strategy at the Charles Schwab Center for Financial Research.
While bitcoin approached that level in late November, prices then bounced, acting as a support for the crypto. Any breakthrough below $84,000 could be followed by more sustained selling, Ferraioli said.
Despite Vanguard adding crypto ETFs to its client offerings, “I wouldn’t call this move an outright endorsement of crypto as a long-term asset,” TeraHash’s Rogers said in an email to MarketWatch.
“We shouldn’t forget that Vanguard isn’t launching its own crypto funds, and it continues to exclude high-volatility ‘meme coins,” he said. “That’s why the move for me is more of a defensive posture to retain clients.”
Stocks also were pushing higher on Tuesday, following a downbeat start to December. The S&P 500 index was up 0.5%, the Dow Jones Industrial Average was 0.6% higher and the Nasdaq Composite Index was up 1%, according to FactSet.
