Vanguard flippening! 11 trillion asset management giant opens BTC, XRP, SOL ETF trading this week.

According to a report by Bloomberg, Vanguard, the world's second-largest asset management company, is making a significant shift, stating that it will allow “ETFs and mutual funds that primarily hold Crypto Assets to trade on its platform.” The demand from retail and institutional clients has jointly contributed to this decision. Starting Tuesday, ETFs and mutual funds that primarily hold Bitcoin, Ethereum, XRP, Solana, and other Crypto Assets will be able to trade on its platform.

From Firm Rejection to Full Opening: A 4-Month Attitude Turnaround of Pioneer Group

The Vanguard Group had previously stated that it would avoid cryptocurrency-related products, including the spot Bitcoin ETFs launched by BlackRock and Fidelity. In August 2024, CEO Salim Ramji also indicated that the company has no plans to launch a cryptocurrency ETF. This resolute refusal has made the Vanguard Group the last bastion of traditional finance on Wall Street resisting encryption.

However, just four months later, the Vanguard Group made a 180-degree turn. Bloomberg reported that the Vanguard Group changed its previous strategy under pressure from retail and institutional clients. Where does this pressure come from? Firstly, it stems from the strong demand of retail clients. After BlackRock and Fidelity's Bitcoin ETF launched in January 2024, it quickly attracted billions of dollars in capital inflow, demonstrating that retail investors have a very strong demand for crypto assets ETFs. Vanguard Group's clients saw that other platforms were able to trade these products and began to request similar services from the Vanguard Group.

Secondly, there is the allocation demand from institutional clients. Pension funds, endowment funds, family offices, and other institutional investors are increasingly viewing crypto assets as a tool for portfolio diversification. If Vanguard continues to reject crypto asset products, these institutional clients may turn to competitors' platforms. In the asset management industry, the loss of client assets is the most fatal threat.

According to a report by Bloomberg, Andrew Kadjeski, the brokerage and investment director at Vanguard Group, stated: “Crypto Assets ETFs and mutual funds have withstood the test of market volatility, achieving expected performance targets while maintaining liquidity. The administrative processes serving these types of funds have matured, and investor preferences are continually changing.” This statement reveals three reasons for Vanguard Group's shift in attitude: the stability of the ETF structure proven by market volatility tests, liquidity and performance meeting targets, and the maturation of administrative processes.

Previous reports indicated that the company has been considering adjustments to its Crypto Assets product policy since at least September of last year. This means that from internal discussions to the final decision, the Vanguard Group experienced an evaluation period of about 15 months. This cautious attitude aligns with the Vanguard Group's consistent conservative style but also shows that once a decision is made to change, it is a well-considered strategic shift.

50 million customers 11 trillion funds: The last bastion of traditional finance opens its gates

According to Bloomberg reports, the platform of the Vanguard Group serves over “50 million brokerage clients,” who manage assets “exceeding 11 trillion dollars.” The shock of these two numbers lies in the fact that they represent one of the largest groups of retail and institutional investors in the world. The Vanguard Group's opening of crypto assets ETF trading means that these 50 million clients can now access crypto assets through a familiar platform.

The $11 trillion in assets under management ranks second only to BlackRock, making Vanguard the second largest asset management company in the world. If even just 1% of this $11 trillion is allocated to Crypto Assets ETFs, it means a potential influx of $110 billion. This scale is enough to have a significant impact on the entire Crypto Assets market. The current total market capitalization of Bitcoin is approximately $1.7 trillion, and $110 billion is equivalent to 6.5% of Bitcoin's market capitalization.

This Wall Street giant has chosen to embrace digital assets, further confirming the ongoing integration between traditional finance and the digital asset space. Vanguard Group is known for its conservative and prudent investment philosophy, with its founder John Bogle being a pioneer of index funds, advocating for long-term holding, low costs, and diversified investments. This conservative gene has led Vanguard Group to maintain a cautious attitude towards cryptocurrency issues.

However, when market demand becomes strong enough to be unignorable, and crypto assets ETFs have proven their structural stability, even the most conservative asset management companies have to make adjustments. The opening of the Vanguard Group marks a shift in traditional finance's attitude towards crypto assets from “skepticism” to “acceptance,” and may even further shift to “embrace.”

Starting from Tuesday, clients of the Pioneer Group can trade funds holding Bitcoin, Ethereum, XRP, Solana, and other crypto assets. This open strategy across all coins demonstrates that the Pioneer Group is not solely focused on Bitcoin but recognizes the legitimacy and investment value of the entire crypto assets ETF market. This is particularly significant for non-Bitcoin assets like XRP and Solana, as they will gain access to institutional exposure on par with Bitcoin.

Key Data of Pioneer Group

Number of Customers: Over 50 million brokerage customers

Manage Assets: Over 11 trillion USD (second globally)

Tradable coins: BTC, ETH, XRP, SOL, etc.

Opening Time: Starting from Tuesday (December onwards)

100 Crypto Assets ETFs Emerge: Regulatory Floodgates Fully Open

(Source: The Block)

Crypto Assets ETF is gradually being launched in the United States—first, the U.S. Securities and Exchange Commission approved the spot Bitcoin ETF in January 2024, and six months later, it approved the spot Ethereum ETF. However, the development momentum has already accelerated: investors can now purchase ETFs tracking XRP, Solana, Dogecoin, and Litecoin.

Last week, Bloomberg's senior ETF analyst Eric Balchunas stated that he expects over 100 new Crypto Assets ETFs to be launched in the next six months. In October, more than 150 cryptocurrency-based exchange-traded products have submitted applications, tracking 35 different digital assets. This wave of applications shows that asset management companies have overwhelming confidence in the Crypto Assets ETF market.

What does the launch of 100 encryption ETFs mean? First, it means diversification in choices. Investors can select from single coin ETFs, multi-coin combination ETFs, leveraged ETFs, or inverse ETFs based on their risk preferences and investment strategies. This rich product line will meet the investment needs of all types, from conservative to aggressive.

Secondly, with the intensifying competition, when there are 100 crypto ETFs in the market, issuers must attract customers by lowering fees, providing better tracking accuracy, or adding additional services. This competition will ultimately benefit investors, as they can obtain higher quality products at a lower cost.

The third is the improvement of liquidity, as more ETF products mean more market participants and trading activities. When liquidity improves, the bid-ask spread narrows, the slippage of large transactions decreases, and the overall market efficiency increases. This is crucial for the transition of crypto assets from a speculative market to a mature financial market.

The applications tracking 35 different digital assets show that the crypto ETF market is expanding from Bitcoin and Ether to the entire crypto assets ecosystem. This expansion provides tokens in various sub-sectors with opportunities for institutional funding. For example, DeFi tokens, Layer-2 tokens, AI tokens, and others may have dedicated ETF products.

The acceleration of the fusion between traditional finance and encryption: The demonstration effect of 11 trillion capital

This Wall Street giant's choice to embrace digital assets further confirms the ongoing integration of traditional finance and the digital asset space. The openness of the Vanguard Group has a strong demonstration effect, as it is known for its conservative and stable approach. When even the Vanguard Group opens up trading for crypto assets ETFs, other traditional financial institutions that are still on the sidelines will lose their last excuse.

In the coming months, more traditional brokers, banks, and wealth management platforms are expected to follow suit in opening up cryptocurrency ETF trading. This domino effect will bring a continuous influx of funds into the cryptocurrency market. More importantly, this influx is not short-term speculative capital, but long-term institutional funds and pensions that have stability and sustainability far beyond retail funds.

For the crypto assets market, the openness of the Vanguard Group is a historic moment. It marks the transformation of crypto assets from marginalized speculative assets to a formally recognized asset class accepted by the mainstream financial system. When asset management companies managing 11 trillion dollars acknowledge the investment value of crypto assets, the debate over whether “crypto assets have value” can basically be put to rest.

Starting from Tuesday, 50 million Vanguard Group customers can easily purchase Crypto Assets ETFs just like buying stock ETFs. This convenience will significantly lower the threshold for ordinary investors to access crypto assets. They do not need to learn how to use crypto wallets, worry about private key security, or open accounts on cryptocurrency exchanges; they only need to click to buy on the familiar Vanguard Group platform.