Vanguard CEO Tim Buckley expressed skepticism regarding Bitcoin’s suitability as a long-term investment option. Despite the Securities and Exchange Commission’s (SEC) approval of spot Bitcoin exchange-traded funds (ETFs) earlier this year, Vanguard refrained from participating in the venture, a decision that raised eyebrows within the investment community.
Buckley cited Bitcoin’s notorious volatility as a primary concern, stating, “Something like Bitcoin is just too volatile and it’s not a store of value. It hasn’t been, and it’s very volatile.” He emphasized the asset’s speculative nature, particularly evident during recent market downturns when Bitcoin prices mirrored the decline of traditional stocks.
Vanguard, renowned for its conservative investment approach, favors assets with underlying cash flow, such as stocks and bonds, to ensure stability and predictability. This strategy aligns with the company’s commitment to helping clients build resilient, long-term portfolios. Consequently, Bitcoin’s lack of inherent value and fluctuating nature diverge from Vanguard’s core principles, discouraging the company from introducing Bitcoin ETFs.
Janel Jackson, Vanguard’s global head of ETF capital markets, echoed Buckley’s sentiments, affirming that while discussions surrounding cryptocurrencies have intensified, they currently do not see a suitable role for such assets in long-term portfolios. However, the term “currently” suggests that Vanguard remains open to reassessing the viability of cryptocurrencies as future investment options.
While Bitcoin falls short of meeting Vanguard’s criteria for inclusion due to its inability to generate cash flows, its growing prominence and expanding use cases may prompt a reevaluation in the future. Nonetheless, Vanguard’s cautious stance indicates a reluctance to embrace cryptocurrencies fully, at least for the time being.
