A senior executive from Vanguard has stirred conversation in the investment community by likening Bitcoin to a collectible toy, despite the firm recently taking steps to enable clients to trade cryptocurrency-related exchange-traded funds (ETFs). This move reflects Vanguard’s cautious approach to digital assets, even as national policies regarding cryptocurrencies evolve.
John Ameriks, Vanguard’s global head of quantitative equity, made these remarks at Bloomberg’s ETFs in Depth conference in New York. He emphasized that Bitcoin lacks the essential cash flow and compounding attributes that Vanguard prioritizes in its long-term investment strategy. He referred to Bitcoin as a “digital Labubu,” comparing it to the popular viral plush collectibles that have captured public attention, suggesting a lack of substantial economic value underpinning the cryptocurrency.
Historically, Bitcoin has drawn parallels to various speculative frenzies—such as the Dutch tulip bulb mania of the 17th century and the Beanie Babies craze of the late 1990s. Critics argue that Bitcoin’s price fluctuations are driven more by scarcity and speculation than by substantive cash flows or practical applications. In recent weeks, Bitcoin’s value has experienced significant volatility, plummeting to around $90,000 after peaking at over $126,000 in October, marking a decline of nearly 28.6%.
Vanguard’s introduction of trading options for crypto-focused ETFs and mutual funds comes after years of hesitance toward digital assets. The shift has coincided with the elevation of pro-Bitcoin CEO Salim Ramji in 2024. Currently managing approximately $12 trillion in assets, Vanguard now permits clients to buy and sell funds that include Bitcoin, Ethereum, XRP, and Solana, thereby integrating cryptocurrency into its broader investment portfolio alongside traditional assets like gold.
While Vanguard has opened the door for clients interested in crypto investments, Ameriks clarified that the firm would refrain from providing investment advice on these assets. “We allow people to hold and buy these ETFs on our platform if they wish to do so, but they do so with discretion,” he stated. He reiterated Vanguard’s position of non-guidance regarding whether to buy, sell, or which cryptocurrencies to hold.
Ameriks did acknowledge that Bitcoin might exhibit value during specific conditions, such as high inflation or periods of political unrest. However, he remains skeptical due to the asset’s relatively short history, which has yet to provide a robust investment rationale. “If you can see reliable movement in the price in those circumstances, we can talk more sensibly about what the investment thesis might be,” he noted, underscoring the need for more consistent evidence before establishing a solid justification for investing in Bitcoin.
