Wall Street Firm Blocks Customers From Buying New Spot Bitcoin ETFs

“A competitor of BlackRock told a client interviewed by Fox Business Channel that the new ETF doesn’t fit the asset manager’s investment philosophy.”

A handful of large Wall Street firms are reportedly blocking retail investors from buying the new “spot” Bitcoin ETF.

Vanguard, the world’s second-largest asset manager after BlackRock, as well as financial advisors Merrill Lynch, Edward Jones, and Northwestern Mutual, do not intend to offer the SEC’s “Spot” ETF to their clients. The Commission approved investment opportunities for 11 exchange-traded funds that began trading on its national exchanges.  ETC Miner

The Commission’s move is seen as a turning point in the $1.8 trillion cryptocurrency market, which is a way to introduce a large number of retail investors to a product that has so far been criticized by regulators and largely ignored by Wall Street.

Spot Bitcoin ETFs: How to Invest and What They Mean

The inclusion of Bitcoin in heavily regulated investment vehicles like spot ETFs means that for the first time, retail investors can get exposure to the world’s largest digital asset through their broker-dealer without having to rely on unregulated cryptocurrency exchanges. It also means that investors don’t have to qualify as qualified investors, which is the criteria for purchasing the Bitcoin Futures ETF launching in 2021.

The move to restrict new ways of investing in cryptocurrencies has led to some customers choosing to turn to other financial institutions that do offer investment opportunities.

Yuga Cohler, a senior engineering manager at Coinbase, told reporters, “I’ve built up $401,000 in savings at Vanguard over the course of eight years while working at Google, and I’ll be moving that into Fidelity.” “Vanguard Group Paternalistic blocking of the Bitcoin ETF is not in line with my investment philosophy.”

BlackRock rival Vanguard told a Fox Business Channel client interviewed that the new ETF doesn’t fit the asset manager’s investment philosophy. A Vanguard spokesperson did not return a call for comment. But a news representative told The Block, a publication focused on cryptocurrencies, that cryptocurrencies are considered highly speculative and unregulated. Offering these assets to clients runs “counter to the goal of helping investors generate positive real returns over the long term.” Bitmain Miner

Spot Bitcoin ETF Approved by SEC

Internal communications between Merrill Lynch and its clients, seen by Fox Business Channel, said that current company policy does not allow investment in spot bitcoin ETFs, although it leaves room for a change in policy at a future date.

A spokesperson for Merrill Lynch did not respond to a request for comment.

Meanwhile, Missouri-based financial services firm Edward Jones has also told clients that it is joining the BTC ETF ban, as has Northwestern Mutual.

Representatives for Edward Jones and Northwestern Mutual did not respond to requests for comment.

Dave Weisberger, CEO of CoinRoutes, said, “It’s normal for companies to conduct due diligence on individual ETFs before making them available to their clients, but Vanguard’s stance suggests that this may have more to do with the assets themselves than the performance of the ETFs.” .