Market Manipulation?: Financial Giants Boycott Spot Bitcoin ETF

Vanguard, the second-largest asset manager, allegedly stated that spot Bitcoin ETFs are not per the company's investment philosophy.

Prasanna Peshkar

Prasanna Peshkar

January 12, 2024 8:27 AM

Market Manipulation?: Financial Giants Boycott Spot Bitcoin ETF

On January 11, trading for spot Bitcoin ETFs commenced on major U.S. exchanges like Nasdaq, and platforms such as Robinhood are set to promptly incorporate support for these products. However, certain firms have purportedly barred users from engaging in trading activities related to these ETFs. Let’s take a look at this Vanguard and Bitcoin ETF article in more detail.

Vanguard, the second-largest asset manager following BlackRock, allegedly stated that spot Bitcoin ETFs are not per the company’s investment philosophy. Beyond refraining from facilitating trading for these recently approved products, Vanguard has reportedly taken the step of disabling the purchase of Grayscale’s GBTC shares on its platform, as reported by multiple users on X.

As reported by the WSJ, Vanguard has categorically stated that it has no intentions of introducing a Vanguard Bitcoin ETF or any other cryptocurrency-related products. The traditional finance heavyweight perceives crypto volatility as a potential risk to its customer-centric long-term positive return strategy, as indicated by statements from the spokesperson.

It’s worth noting that Vanguard holds a significant stake in MicroStrategy shares, the company led by Michael Saylor, which, in turn, possesses a substantial amount of Bitcoin (BTC) valued at over $8 billion.

Additionally, there are indications that other well-established institutions such as Merrill Lynch, Citi Bank, UBS, Wells Fargo Advisors, and Raymond James are poised to join the boycott against spot Bitcoin ETFs. Specifically, Merrill Lynch intends to monitor the performance of these ETFs and may consider reassessing its decision based on the observed outcomes.

Spot Bitcoin ETFs Experience High Volume but Face Skepticism

In the first 30 minutes of trading, spot Bitcoin ETFs recorded a trading volume exceeding $1.2 billion. As trading commenced, Bitcoin (BTC) witnessed a momentary surge, reaching around $49,000. However, the price has slightly retreated to approximately $46,036, as reported by CoinMarketCap.

Despite the approval of BTC ETFs by the Securities and Exchange Commission, Peter Schiff, a steadfast Bitcoin skeptic, continues to voice criticism against cryptocurrencies. Schiff has specifically scrutinized mainstream media outlets for their coverage of these products and has raised concerns about the liquidity associated with spot Bitcoin ETFs.

Crypto Community Responds: Calls for a Vanguard Boycott

Many in the crypto community are upset with the $7.7 trillion asset manager, Vanguard, because they don’t allow trading of spot Bitcoin ETFs. This big investment company apparently only lets investors sell Grayscale’s main Bitcoin product, GBTC, which recently became a spot ETF.

People, including Coinbase’s senior engineering manager Yuga Cohler, are not happy with how Vanguard is handling this. Cohler wants to move his Roth 401(k) savings from Vanguard to Fidelity, which is one of the companies that launched 10 spot Bitcoin ETFs on January 11. Cohler criticizes Vanguard for what he calls “paternalistic blocking” of Bitcoin ETFs, saying it goes against his investment philosophy.

Bitcoin commentator Neil Jacobs also plans to take his money out of Vanguard, calling their reported decision a “terrible business decision.”

Vanguard’s Exclusive Selling of GBTC Sparks Fears of Market Manipulation

The news about Vanguard boycotting has sparked concerns within the crypto community, with some suggesting that market manipulation might be underway. The fact that Vanguard is restricting activities to only selling Grayscale’s Bitcoin product, GBTC, has raised eyebrows and fueled speculation about potential manipulation. 

This move by Vanguard has led to apprehensions among investors, emphasizing the need for transparency and fair practices in the cryptocurrency market. The community is closely watching for further developments to assess the impact of Vanguard’s decision on the broader market dynamics.

Prasanna Peshkar
Article By

Prasanna Peshkar

Prasanna Peshkar is a seasoned writer and analyst specializing in cryptocurrency and blockchain technology. With a focus on delivering insightful commentary and analysis, Prasanna serves as a writer and analyst at CryptoTicker, assisting readers in navigating the complexities of the cryptocurrency market.

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