The initial cryptocurrency should perhaps be viewed as a speculative collectible item, rather than a functioning asset. This was stated by Vanguard’s head of quantitative investing, John Ameriks, Bloomberg reports.
He noted that Bitcoin lacks the attributes that generate yield, compound interest, and cash flow. It is these qualities of instruments that the company focuses on for long-term investments.
According to Ameriks, there is no compelling evidence that the underlying technology of cryptocurrency provides sustained economic value.
“Therefore, I find it difficult to view Bitcoin as anything more than a digital equivalent of Beanie Babies,” he added, referring to the popular collectible soft toys.
Previously, the management of the $\sim\$12 trillion asset manager has repeatedly highlighted the speculative nature of cryptocurrency and classified it as an “immature” asset class.
In early December, Vanguard enabled access to trading ETFs and mutual funds based on digital assets for over 50 million brokerage clients.
Ameriks explained this decision by the fact that Bitcoin ETFs have demonstrated effectiveness since their launch in January 2024. During this time, Vanguard became convinced that the products “match their stated characteristics and description.”
“We allow people to hold and purchase these ETFs on our platform if they wish. But they do so at their own discretion. We do not intend to offer them advice regarding buying or selling or which crypto tokens they should hold. At this stage, we simply are not going to do that,” the manager emphasized.
Ameriks admitted that certain scenarios could confirm the non-speculative worth of Bitcoin. For instance, the value of digital gold might significantly increase amid high inflation or political instability.
“If we observe a sustained price movement under such circumstances, it would be reasonable to discuss some investment strategy and the asset’s possible role in a portfolio. But until then—we are talking about too brief a history,” he added.
It is recalled that in the summer, analysts discovered that Vanguard had invested over $9 billion in Strategy, which possesses the largest corporate Bitcoin reserve.
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