Crypto Market Recovery, Why Vanguard Changed Its Stance on Crypto as BTC Hits $91k
- Vanguard has reversed its ban and now allows clients to trade third-party Bitcoin, Ether, and Solana ETFs.
- Bitcoin rebounded strongly above $91,000 on the news while high-risk celebrity tokens continued to crash.
- Market sentiment remains cautious with "Extreme Fear" dominating despite the institutional adoption milestone.
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| Image From Axios |
The wall between traditional finance and the crypto world just developed a massive crack. Vanguard Group has officially ended its long standing boycott of cryptocurrency products. The asset management giant confirmed on Tuesday that it will now allow clients to trade third party crypto exchange traded funds on its brokerage platform. This marks a stunning reversal for a firm that famously refused to touch Bitcoin ETFs when they launched in early 2024. The timing coincided perfectly with a sharp market recovery that saw Bitcoin surge back above $91,000.
Clients can now access major funds like BlackRock’s iShares Bitcoin Trust along with products covering Ether and Solana. Vanguard leadership previously argued that crypto was too volatile for long term portfolios. However the persistent demand from investors seems to have forced their hand. Andrew Kadjeski leads brokerage and investments at Vanguard and noted that these funds have performed as designed during market stress. The firm realized it could not ignore the asset class without risking a client exodus to more flexible rivals.
This strategic pivot arrives just over a year after Salim Ramji took the helm as CEO. Ramji is a former BlackRock executive who has long advocated for blockchain technology. His influence likely played a significant role in softening the firm’s rigid anti crypto stance. Vanguard made it clear that they will not launch their own crypto funds or manage digital assets directly. They are simply acting as a conduit for clients who want exposure. Meme coins and high risk speculative tokens remain banned from the platform.
The market responded to the news with a violent upward move. Bitcoin rallied more than 7% to tag $92,323 before settling near the $91,000 range. This bounce provides relief after a brutal month where the asset lost nearly 30% of its value. The leading cryptocurrency had been sliding since hitting a record high of over $126,000 in October. The arrival of Vanguard bulls suggests that institutional scaffolding is becoming strong enough to support the next leg of growth.
External factors also helped fuel the recovery. Fears regarding Strategy Inc. and its Bitcoin holdings have subsided. The company formerly known as MicroStrategy established a $1.4 billion cash reserve to manage its debt obligations. This move calmed traders who worried the company might be forced to liquidate its massive Bitcoin stash. The removal of that immediate sell side pressure allowed buyers to step back in with confidence.
However the broader market remains on edge. The "Fear and Greed Index" is currently signaling "Extreme Fear" despite the price bounce. Funding rates in the futures market recently flipped negative. This indicates that many traders are still betting on further downside. Investors are currently hoarding stablecoins like USDT rather than aggressively buying the dip. This behavior suggests the market is waiting for clarity from the Federal Reserve before taking on significant new risk.
We also see a stark divergence between quality assets and celebrity projects. While Bitcoin recovered we watched Trump related assets implode. Shares of American Bitcoin Corp crashed by more than 50% on Tuesday amid intense volatility. Tokens associated with the Trump family such as WLFI and MELANIA also suffered deep losses. This flush indicates that capital is rotating back into established assets like Bitcoin and Ether while abandoning speculative hype coins.
Technically the market defended a crucial line in the sand. Analysts peg the average cost basis for US spot Bitcoin ETF holders at around $84,000. Prices approached this level in late November before bouncing hard. This area now acts as critical support. The entry of Vanguard into the arena adds a new layer of demand that could help protect this floor. The industry is transitioning from a liquidation phase back toward deliberate risk taking.