Vanguard Blocks Spot Bitcoin ETF Trading, Prompting Some Investors to Close Accounts
Asset management giant Vanguard has banned trading of the newly approved spot Bitcoin exchange-traded funds (ETFs) on its platform, a controversial move that has frustrated some customers and led them to transfer funds elsewhere.
Vanguard confirmed to media outlets that “spot Bitcoin ETFs will not be available for purchase on the Vanguard platform.” A spokesperson said these products “do not align” with the asset classes that “Vanguard views as the building blocks of a well-balanced, long-term investment portfolio” like stocks and bonds.
The policy change has sparked outrage among Bitcoin investors who were hoping to gain spot ETF exposure through Vanguard. Multiple customers have reported being unable to trade Grayscale’s Bitcoin Trust or BlackRock’s iShares Bitcoin Trust on Vanguard’s platform, receiving error messages stating “buy orders are not currently accepted for this security.”
Some have vowed to close their Vanguard accounts as a result. Senior engineering manager at Coinbase Yuga Cohler announced plans to convert his Roth 401(k) savings at Vanguard to Fidelity, which offers spot Bitcoin ETF trading. Bitcoin commentator Neil Jacobs also said he would transfer funds out of Vanguard due to the “terrible business decision.”
The SEC greenlit several spot Bitcoin ETFs on Wednesday after years of anticipation. Trading volumes topped $4.5 billion on the first day, led by BlackRock, Grayscale and Fidelity’s offerings. But Vanguard’s hardline stance shows that regulatory approval does not guarantee unconditional market acceptance.
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