John Ameriks, global director of quantitative equity at Vanguard, stated that Bitcoin resembles more a speculative collectible than a serious long-term investment. In his speech at the Bloomberg ETFs in Depth conference in New York, he compared Bitcoin to a viral stuffed animal, calling it a "digital Labubu."
Ameriks explained that Bitcoin does not meet Vanguard's standards for productive assets. He added that the company seeks income, cash flow, and capitalization over time.
In his opinion, Bitcoin lacks all three. Without evidence of lasting economic value, he sees it as nothing more than a speculative object.
Earlier this month, Vanguard's trading platform opened a short list of spot Bitcoin ETFs. This move allowed millions of the firm's clients to trade cryptocurrency ETFs, although Vanguard does not operate with BTC ETFs.
Their opinions are based on the recent massive drop in the price of Bitcoin. The price of BTC is trading at approximately $90,232, down from $126,000 a few weeks ago. While sharp declines have been preceded by strong recoveries, sharp price fluctuations remain a constant feature of this digital asset.
According to Ameriks, the decision to allow the trading of cryptocurrency ETFs was made after months of observing the activity of Bitcoin ETFs. Vanguard was concerned about ensuring that the products met expectations.
However, Vanguard does not promote investment in cryptocurrencies. Its clients can buy and sell ETFs related to the digital asset. Additionally, Vanguard does not provide recommendations on the purchase, sale, or holding of any digital asset.
Ameriks did not deny that Bitcoin might be necessary in certain situations, such as periods of high inflation and political instability. However, he asserted that its price has a poor track record due to its short history.
Therefore, it lacks a history that would allow for the development of a reliable investment thesis. Meanwhile, Bernstein analysts disagree. They foresee Bitcoin trending upwards due to ETF flows amidst the recent volatility.
Vanguard did show greater optimism about blockchain technology. A spokesperson for the company stated that the firm sees potential in blockchain to improve market structure and financial infrastructure over time. However, this optimism does not yet extend to Bitcoin as an asset.
