Vanguard Finally Allows Crypto ETFs and Mutual Funds. You Can Invest Right Now. — Barrons.com
By Andrew WelschVanguard is allowing customers to invest in cryptocurrency exchange-traded funds and mutual funds, reversing its policy of banning such investments from its massive brokerage platform.The change is effective today. The company is essentially providing investors access to funds by other companies that track digital assets such as Bitcoin, Ethereum, XRP, and Solana, but not meme coins.The company changed course now that there's more data available about how crypto funds perform, Vanguard says on its website."Just as we do with all investment vehicles and asset classes, Vanguard consistently monitors the cryptocurrency space," the company said."This ongoing analysis has informed our decision to allow most third-party cryptocurrency ETFs and mutual funds on our brokerage platform," the firm added. "These products have been tested through periods of market volatility, performing as designed while maintaining liquidity; the administrative processes to service these types of funds have matured; and investor preferences continue to evolve."The change also comes after investors have poured billions into cryptocurrency ETFs since BlackRock and other asset managers began launching crypto funds in early 2024.The iShares Bitcoin Trust ETF launched in January 2024 and quickly amassed billions in assets, becoming one of the largest crypto funds. It had more than $66 billion in net assets as of Dec. 1.Vanguard is one of the largest asset management companies in the world and operates large brokerage and wealth management businesses. It serves more than 50 million investors, as of Dec. 31, 2024.The Malvern, Pa.-based company has no plans to launch its own cryptocurrency fund. The current setup mirrors Vanguard's approach to gold: The company allows investors to purchase gold ETFs, but doesn't have a proprietary fund for the precious metal.Bitcoin prices were up 3.6% Tuesday morning, but have tumbled in recent weeks.Other brokerage and wealth management companies have been expanding investors' access to cryptocurrency investments. For example, Charles Schwab plans to launch a new cryptocurrency platform next year that would enable customers to directly hold digital assets such as Bitcoin at Schwab. Schwab customers already have access to cryptocurrency ETFs, but the new platform might encourage customers to consolidate their holdings at Schwab.Bank of America's Merrill and private bank units plan to allow financial advisors to recommend select crypto exchange-traded products to clients beginning next year. Qualified clients have had access to Bitcoin ETFs on an unsolicited basis since early 2024. But the policy change could increase the number of wealth management clients who invest in cryptocurrency, albeit within certain parameters."For investors with a strong interest in thematic innovation and comfort with elevated volatility, a modest allocation of 1% to 4% in digital assets could be appropriate," Chris Hyzy, chief investment officer of Merrill and Bank of America Private Bank, said in a statement. "Our guidance emphasizes regulated vehicles, thoughtful allocation, and a clear understanding of both the opportunities and risks."Write to Andrew Welsch at [email protected] content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.