The Vanguard Group, the world's second-largest asset manager with approximately $10 trillion in assets under management (AUM), has reversed its longstanding cautious stance on cryptocurrencies by allowing ETFs and mutual funds primarily holding digital assets to trade on its platform. This marks a significant policy shift for the asset management giant, which had previously refused to offer any Bitcoin or crypto-related ETF trading channels—even when spot Bitcoin ETFs gained SEC approval in early 2024.
Starting Tuesday EST, Vanguard will permit ETFs and mutual funds holding major cryptocurrencies like Bitcoin, Ethereum, XRP, and Solana to trade on its platform. This decision departs from Vanguard's traditional view that digital assets are too volatile and speculative for its conservative investment portfolios. The move comes amid a $1 trillion+ crypto market pullback since October, with some traders viewing it as a potential catalyst for Bitcoin's rebound.
Persistent demand for crypto ETFs—from both retail and institutional investors—has been a key driver behind Vanguard's change of heart. Since their January 2024 launch, spot Bitcoin ETFs have amassed tens of billions in assets. Even after recent outflows and Bitcoin's 30%+ price drop, BlackRock's IBIT ETF still manages about $70 billion, down only slightly from its $100 billion peak two months ago.
Vanguard's policy shift follows September reports that it was considering allowing crypto ETF trading. The move grants access to SEC-regulated crypto products for over 50 million brokerage clients with collective assets exceeding $10 trillion. Despite recent price declines, crypto-related ETFs remain among the fastest-growing segments in U.S. fund management history.
Crypto bulls interpret Vanguard's "capitulation" as psychological fuel for an upward trend, seeing it as evidence that traditional finance clients can no longer resist digital assets' gravitational pull. "Crypto ETFs and mutual funds have demonstrated operational resilience during market turbulence," said Andrew Kadjeski, Vanguard's head of brokerage and investment services. "Administrative processes have matured alongside evolving investor preferences."
The change comes over a year after CEO Salim Ramji—a former BlackRock executive and longtime blockchain advocate—took leadership. While Vanguard will support most regulated crypto ETFs and mutual funds (treating them similarly to gold as "non-core assets"), it has no immediate plans to launch proprietary crypto products like BlackRock or Ark Invest. Funds tied to SEC-defined "memecoins" remain excluded.
Market Impact: Bitcoin's Next Bull Run? Vanguard's endorsement is seen as a symbolic breakthrough—the last major traditional finance holdout softening its stance. This could serve as both a milestone for institutional crypto adoption and a potential driver for Bitcoin's recovery from its 30%+ bear market decline since October highs.
Amid a "Black Monday" for crypto that saw $1 billion in leveraged positions liquidated within 24 hours, El Salvador's government added over $100 million worth of Bitcoin to its holdings—a move analysts interpret as strategic "buying the dip." Standard Chartered, which accurately predicted Bitcoin would surpass $100,000 by late 2024, notes this downturn aligns with historical third-wave corrections in past cycles. Geoff Kendrick, the bank's global head of digital assets research, forecasts a year-end rebound, suggesting this may be Bitcoin's last sub-$100,000 dip. His long-term projection reaches $500,000 by the end of a hypothetical Trump second term.
Wall Street firm Bernstein argues this correction—unlike past 60-70% crashes—represents a "relatively shallow" reset due to transformed fundamentals. Over the past six months, while long-term holders sold ~340,000 BTC, nearly all were absorbed by spot ETFs, sovereign buyers like El Salvador, and institutional vehicles (e.g., Bitcoin treasuries), creating a robust demand floor. Bernstein anticipates Bitcoin may consolidate between $80,000-$90,000 before resuming its bull market trajectory.