Vanguard faces backlash over Ethereum ETF ban
Vanguard Group, a top US investment advisor, is facing criticism for banning Spot Ethereum ETFs from its platform. This decision goes against the growing interest in cryptocurrency and recent regulatory changes. Earlier, the firm had also banned Spot Bitcoin ETFs.
Vanguard criticized for Ethereum ETF stance
Bloomberg’s Senior ETF analyst, Eric Balchunas, was blunt on social media. In a post on X, he criticized Vanguard’s decision on Spot Ethereum ETFs, accusing the firm of being overly protective.
https://x.com/EricBalchunas/status/1795975203123573031
Balchunas sarcastically noted that Vanguard’s investors are knowledgeable and can make smart investment decisions. He pointed out that while crypto has influenced some top government officials, Vanguard still refuses to offer Ethereum ETFs, sticking to their focus on building a balanced, long-term portfolio.
He also criticized Vanguard’s cautious approach to Ethereum and Bitcoin ETFs but understood their conservative stance. He noted that Vanguard operates differently from other asset managers, focusing on long-term stability instead of quick profits.
He added that Vanguard has been earning nearly a billion dollars a day for over ten years, so they aren’t worried about the success of other ETFs. This decision follows the US Securities and Exchange Commission (SEC) approving filings from several issuers for Spot Ethereum ETFs.
However, trading for these ETFs is still on hold. The SEC must first approve the S-1 registration statements from the fund issuers. Experts, including Bloomberg analysts, are optimistic, predicting these products will be ready by July 4, 2024.
Speaking to Blockworks, a Vanguard representative explained the company’s position. Despite constantly reviewing its offerings and considering new products, Spot Ether ETFs will not be available on its platform.
Vanguard’s crypto hesitation examined
The firm has always distanced itself from cryptocurrencies, saying they are still immature. A spokesperson explained that Vanguard’s products focus on stocks, bonds, and cash, not crypto. Vanguard sees these traditional assets as the foundation of a solid, long-term investment plan.
Balchunas mentioned a potential positive with Salim Ramji becoming Vanguard’s new CEO. Ramji, who used to work at BlackRock, helped launch their leading Bitcoin ETF, IBIT. People think he also had a big part in creating BlackRock’s ETHA Ethereum ETF.
https://x.com/EricBalchunas/status/1795979161829347401
Thus, Balchunas speculated that Ramji’s experience in crypto could influence Vanguard’s attitude toward cryptocurrency products. He suggested that there could be changes with a CEO who knows crypto.
ARK Invest ends Ethereum ETF partnership
ARK Invest announced in a new filing on Friday that it will end its partnership with 21Shares for a planned spot Ethereum fund.
According to a new Form S-1, the Ark 21Shares Ethereum ETF has been renamed the 21Shares Core Ethereum ETF. A spokesperson for 21Shares confirmed this change in an email to The Block.
The filing also notes that ARK Invest will not partner for this ETF. The spokesperson expressed excitement about the SEC’s recent approval and said the company is committed to making crypto more accessible for U.S. investors.
The spokesperson noted that 21Shares and ARK will keep working together on the ARK 21Shares Bitcoin ETF, which started in January, along with other existing futures products.
ARK stated it will not move forward with an Ethereum ETF but remains committed to the ARK 21Shares Bitcoin ETF. The spokesperson said that ARK believes in Ethereum’s potential and long-term value.
However, for now, they will not advance with an Ethereum ETF. They also mentioned that ARK will keep looking for ways to effectively expose their investors to this technology.
Last week, the U.S. SEC approved 19b-4 forms for eight Ethereum ETFs. However, issuers need to have their S-1 statements finalized before trading begins. Franklin Templeton, VanEck, and Invesco Galaxy submitted their updated S-1 forms as required on Friday.
