- Vanguard labels Bitcoin as a speculative asset rather than a productive investment.
- Bitcoin lacks income and cash-flow properties valued by Vanguard for long-term holdings.
- Blockchain technology is praised, but cryptocurrency involvement is questioned.
- Vanguard allows trading of spot Bitcoin ETFs without providing investment advice.
- Bitcoin’s value could increase in high inflation or political instability but lacks a long-term history for clear investment roles.
The $9.3 trillion asset manager Vanguard has reiterated its cautious stance on Bitcoin (BTC), describing it as a “speculative digital toy.” John Ameriks, Vanguard’s global head of quantitative equity, compared Bitcoin more to a collectible item like a plush toy than a dependable productive asset. Speaking at a financial conference in New York, he highlighted that Bitcoin lacks income generation, compounding, and cash-flow characteristics that Vanguard seeks in long-term investments.
During the event, Ameriks expressed appreciation for blockchain technology but questioned the necessity of involving cryptocurrencies with it. He asked, “Is there a way to use only blockchain without involving cryptocurrency?” Recently, Vanguard began allowing clients to trade spot Bitcoin exchange-traded funds (ETFs) on its platform. Ameriks stated, “We allow people to hold and buy these ETFs on our platform if they wish to do so, but they do so with discretion… We’re not going to give them advice as to whether buy or sell or which crypto tokens they ought to hold. That’s just not something we’re going to do at this point.”
Despite the reservations, Ameriks mentioned potential scenarios where Bitcoin might gain non-speculative value. The cryptocurrency could prove valuable during high inflation or political uncertainty where price movement is more reliable. He noted, “If you can see reliable movement in the price in those circumstances, we can talk more sensibly about what the investment thesis might be and what role it could play in a portfolio, but you just don’t have that yet — you’ve still got too short of a history.”
At the time of reporting, Bitcoin experienced a slight price correction, dipping to around $89,000. According to CoinGecko, BTC dropped 2.6% over the last 24 hours, 3.7% in the past week, 1.6% in 14-day charts, 15.3% over the previous month, and 7.3% since December 2024. The recent Federal Reserve interest rate cut had raised expectations for a rally, but fresh volatility has paused the surge.
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