Vanguard, which has shunned digital assets, begins selling Bitcoin ETFs

"Shift in direction due to increased demand from individual and institutional investors"

"Will not launch its own cryptocurrency investment ETF for the time being"

Vanguard Group, the world's second-largest asset manager, has reversed its long-standing stance of not dealing with cryptocurrencies and decided to sell exchange-traded funds (ETFs) and mutual funds that invest in cryptocurrencies.

On the 2nd (local time), Vanguard Group announced it would start selling on its platform ETFs and mutual funds holding Bitcoin, Ethereum, Ripple (XRP), Solana, and others starting that day.

Vanguard had said digital assets are too volatile and speculative to include in portfolios, and did not launch a spot Bitcoin ETF last year. Vanguard's competitor and the world's largest asset manager, BlackRock, has a Bitcoin-investing ETF (IBIT) that currently stands at about $70 billion. This is a decrease from about $100 billion at the beginning of October.

However, as demand from retail and institutional investors increased, Vanguard also changed direction. Despite recent declines in Bitcoin, ETFs investing in cryptocurrencies are one of the fastest-growing sectors in U.S. fund history. Crypto bulls view Vanguard's sale of cryptocurrency investment funds as a signal that traditional finance can no longer ignore the importance of digital assets.

Andrew Kazeski, head of Vanguard's brokerage and investment division, said, "Cryptocurrency ETFs and mutual funds have shown maturity, maintaining liquidity amid market volatility and operating as designed."

This change came about roughly a year after Salim Ramji, a former BlackRock executive and long-time blockchain advocate, took office as Vanguard CEO.

However, Vanguard does not plan to create its own digital asset investment funds for the time being. Also, in accordance with the U.S. Securities and Exchange Commission (SEC) guidance, it will continue not to handle funds linked to meme coins.

Kim Jeong-a, guest reporter kja@hankyung.com