Why Vanguard Rejects Bitcoin ETFs: Is It Too Volatile For Your Retirement?

Vanguard Chairman and CEO Tim Buckley and Chief Investment Officer Greg Davis on Friday reiterated their company's position on Bitcoin exchange-traded funds (ETFs), emphasizing their long-held view that Bitcoin BTC/USD is a speculative asset and does not belong in a long-term investment portfolio.

What Happened: When questioned about the possibility of Vanguard offering a Bitcoin ETF during a webcast, Buckley stated their lack of plans to do so and that a significant shift in the asset class itself would be required for their stance to change.

He elaborated on their reasoning, highlighting the key difference between Bitcoin and traditional investment vehicles.

Buckley characterized Bitcoin as a "speculative asset," contrasting it with assets that generate underlying cash flow.

He explained how their existing funds, like stock funds, invest in companies with future earning potential. Bond funds, he added, offer predictable returns through coupon payments and principal repayment.

Buckley expressed his difficulty in understanding how Bitcoin would appreciate within a portfolio, given its volatility and lack of a proven track record as a store of value.

He pointed out that Bitcoin's performance during the recent market downturn mirrored the decline in stocks, further solidifying his perspective on its speculative nature.

Also Read: Bitcoin Bloodbath: Digital Gold Loses Its Luster, But Are Investors Shaken Or Shopping?

What It Means For Investors

By outlining this clear distinction between cash-flow generating assets and Bitcoin, Buckley underscores Vanguard's commitment to providing investment solutions focused on long-term value creation for their clients.

This position aligns with their established philosophy of low-cost index funds that passively track broad markets, rather than actively chasing speculative trends.

Price Action: At the time of writing, Bitcoin was trading at $68,150, down 4.3% over the past 24 hours, according to Benzinga Pro.

Read Next: Michael Saylor's Bold Bet: Analysts Marvel At MicroStrategy's Double-Down On Bitcoin

Image created using artificial intelligence with Midjourney.