Vanguard Exec Questions Bitcoin Value Despite ETF Shift

A Vanguard Executive has questioned Bitcoin’s investment value week in New York while allowing clients to trade crypto-linked exchange-traded funds. The move shows how asset managers remain cautious about Bitcoin, citing volatility and missing cash flow, even as access to crypto products expands.

Vanguard Executive Compares Bitcoin to Collectibles

Bitcoin drew criticism from Vanguard during a Bloomberg event held this week in New York. John Ameriks, Vanguard’s global head of quantitative equity, spoke at Bloomberg’s ETFs in Depth conference. 

He said Bitcoin does not fit the firm’s long-term investment approach. Ameriks said Bitcoin lacks cash flow and does not benefit from compounding growth.

He compared Bitcoin to a “digital Labubu,” referring to collectible toys. Ameriks said the comparison reflected doubts about lasting economic value. He added that there is little evidence showing that the blockchain behind Bitcoin creates economic returns.

Bitcoin has often been compared to speculative trends from earlier periods. Critics have likened it to Dutch tulip bulbs and Beanie Babies. These comparisons are used to argue that Bitcoin price increases rely more on scarcity stories than on business use.

Price swings remain a concern. Bitcoin recently traded near $90,000 after reaching highs above $126,000 in October. That represents a decline of about 28.6%. Ameriks said such movements make it difficult to treat Bitcoin as a stable long-term asset.

He also said Bitcoin’s track record is short compared with traditional investments. Because of this limited history, Vanguard believes there is not enough data to support a case today.

Why Vanguard Still Opened Bitcoin ETF Trading

Despite its cautious view, Vanguard recently allowed clients to trade crypto-focused exchange-traded funds. This marked a shift after years of limiting exposure to digital assets on its platform.

The decision followed the launch of spot Bitcoin ETFs in January 2024. These products created performance records that Vanguard could review. Ameriks said this helped support the decision, without offering guidance.

Vanguard manages about $12 trillion in assets. Clients can now trade funds holding Bitcoin, Ethereum, XRP, and Solana. These assets are listed alongside alternatives such as gold.

Meanwhile, as mentioned in our previous news Vanguard, one of the world’s leading investment firms, has recently become the largest institutional shareholder of Michael Saylor’s MicroStrategy.

Vanguard Maintains Neutral Position on Bitcoin

Ameriks said Vanguard does not advise clients on crypto buying or selling. Customers make their own decisions on the platform. The firm does not recommend specific tokens.

He said Bitcoin could show value during inflation or political stress. However, he said evidence remains limited. Clearer price patterns would be needed before forming a view.

Notably, on Bitcoin price outlook, most analysts expect Bitcoin to trade in the $150,000 to $500,000 range as halvings reduce supply and institutional adoption increases.