Vanguard prepares to open brokerage doors to crypto ETFs

Vanguard, the most formidable holdout in asset management, is drafting plans for a strategic retreat. The $10 trillion giant is reportedly preparing to grant its brokerage clients access to crypto ETFs, signaling a profound shift in institutional acceptance.

On Sept. 26, crypto journalist Eleanor Terrett reported that Vanguard has initiated internal groundwork and external discussions to facilitate access to select third-party crypto ETFs for its brokerage clients.

According to a source familiar with the plans, the firm is acting in response to mounting client demand and a notably shifting regulatory landscape. The source emphasized that Vanguard is being “very methodical” in its approach, acknowledging the market dynamics that have evolved since the landmark ETF approvals in 2024.

Crucially, the report indicates this move does not include plans for Vanguard to launch its own proprietary crypto products.

From rejection to reconsideration

This potential pivot marks a stark departure from Vanguard’s firm stance in January 2024, when the firm blocked client access to the newly approved spot Bitcoin ETFs. At the time, the asset manager stated the products conflicted with its offering focused on traditional asset classes like equities, bonds, and cash, which it considered the essential building blocks of a long-term portfolio. It deemed Bitcoin’s volatility incompatible with its investment philosophy.

The road to this reversal, however, has been paved with telling clues. As Bloomberg Senior ETF analyst Eric Balchunas noted, the appointment of Salim Ramji as CEO in mid-2024 was a critical signal.

Ramji, who personally oversaw the launch of BlackRock’s iShares Bitcoin Trust (IBIT), brought an insider’s understanding of the digital asset market to Vanguard’s top role. Balchunas had previously speculated that Ramji’s leadership could lead to a reversal of the ETF ban within a year or two, characterizing it not as a radical shift but as an incremental change for a platform that already offers gold ETFs.

This context makes the current developments appear less like a sudden about-face and more like the execution of a deliberate, CEO-led strategy. Further complicating Vanguard’s public skepticism was its quiet ascent to becoming the largest shareholder in Strategy, which is widely regarded as a publicly traded Bitcoin proxy.

According to Bloomberg, through its various funds, Vanguard accumulated an 8% stake in the firm. This substantial investment stood in sharp contrast to its public statements, suggesting a nuanced, if not contradictory, approach to gaining exposure to the digital asset ecosystem through traditional equity channels.