Pioneer Group Opens Crypto ETFs but Warns: Bitcoin is a speculative asset like Labubu

Vanguard, the pioneer group managing $12 trillion in assets, began allowing clients to trade spot Bitcoin ETFs earlier this month. However, John Ameriks, head of global quantitative equities, described Bitcoin at the Bloomberg ETF Deep Dive Conference as a “digital version of Labubu,” a speculative digital collectible. Despite opening crypto ETF trading, Vanguard emphasizes that it only provides a trading channel and does not offer advice.

From resolute opposition to passive openness attitude shift

Vanguard has long been known for its stance of “not touching cryptocurrencies.” After BlackRock and Fidelity launched Bitcoin spot ETFs in January 2024, Vanguard publicly reiterated its refusal to list these products multiple times, claiming they lack intrinsic value and do not align with the company’s long-term investment philosophy. This firm stance is unique in the asset management industry. While competitors like BlackRock, Fidelity, and Invesco embrace crypto ETFs, Vanguard remains steadfast.

However, earlier this month, this asset management giant managing $12 trillion suddenly opened its trading platform to crypto ETF trading, allowing millions of investors to buy and sell certain digital asset ETFs. The reasons behind this attitude shift are quite intriguing. Ameriks stated that part of the decision was driven by the fact that, since the launch of Bitcoin funds in January 2024, crypto ETFs have established a solid track record. Vanguard hopes to ensure these products are “truly as they are described.”

This explanation reveals Vanguard’s dilemma. On one hand, the company insists that Bitcoin lacks investment value; on the other hand, customer demand for crypto ETFs is growing, and competitors have captured significant market share. BlackRock’s iShares Bitcoin Trust (IBIT) has approached $100 billion in assets, becoming one of the fastest-growing ETFs in history. If Vanguard continues to refuse listing, it risks losing clients. Opening trading without providing advice becomes a compromise between ideological conviction and business reality.

Ameriks’s statement is highly representative: “We allow users to hold and purchase these ETFs on our platform, but they must decide for themselves. Vanguard does not provide advice on buying, selling, or which cryptocurrencies to hold, at least for now.” This clearly delineates responsibility: Vanguard offers tools but does not endorse, and investment decisions and consequences are borne by clients.

Bitcoin vs. Labubu: the controversy over the value of speculative collectibles

Ameriks compared Bitcoin to Labubu plush toys, sparking a heated debate in the crypto community. Labubu is a trendy collectible that has exploded in popularity in recent years, with prices soaring from dozens of dollars to hundreds or even thousands, but its intrinsic value is merely fabric and stuffing. Ameriks’s logic is that Bitcoin is similar to Labubu—both are speculative assets driven by consensus and hype, lacking the ability to generate cash flow.

Vanguard’s three major doubts about Bitcoin

Lack of cash flow: Stocks have dividends, bonds have interest, real estate has rent, but Bitcoin cannot generate ongoing income.

No intrinsic value support: Price is entirely determined by market sentiment and supply-demand, with no measurable fundamental anchor.

Insufficient historical data: Bitcoin has only been around for 16 years, and its performance over a complete economic cycle has yet to be validated.

This perspective reflects the typical attitude of traditional finance toward cryptocurrencies. Vanguard’s investment philosophy is built on value investing and discounted cash flow models. They seek assets that can generate stable income and predictable future cash flows. Bitcoin does not fit this framework because it does not produce dividends, interest, or rent; its value depends entirely on “the next buyer willing to pay.” From this angle, Bitcoin is more akin to a collectible than a traditional investment asset.

However, crypto advocates counter that this analysis overlooks Bitcoin’s monetary properties and network effects. Gold also does not generate cash flow, yet no one considers it a speculative asset. Bitcoin’s scarcity (limited to 21 million coins), decentralization, and global transferability make it a store of value in the digital age. As more institutions adopt it, Bitcoin’s monetary consensus is forming, and this consensus itself is a source of its value.

Insufficient historical data and the possibility of high inflation scenarios

Ameriks admits that in certain situations, Bitcoin may have non-speculative value. For example, during high inflation or political turmoil, Bitcoin’s value could be higher. “If you can see reliable price trends in such conditions, we can discuss investment logic and its potential role in a portfolio more rationally. But we haven’t seen that yet—history is still too short.”

This view exposes the core dilemma faced by traditional asset management firms: how to evaluate emerging assets with limited long-term data? Bitcoin was created in 2009 and has experienced only one full economic cycle, without truly testing during a global financial crisis or hyperinflation. During the 2020 pandemic, Bitcoin performed strongly, but that crisis was mainly a liquidity shock rather than a credit crisis.

Vanguard’s cautious stance is not unique among institutional investors. Many pension funds, insurance companies, and sovereign wealth funds remain reserved about Bitcoin because they bear long-term fiduciary responsibilities and must ensure prudent asset allocation. For these institutions, assets without 30-50 years of history inherently carry uncertainty, regardless of current performance.

Yet, the market is voting with its feet. Less than a year after the launch of spot Bitcoin ETFs, assets under management have surpassed $100 billion, demonstrating strong demand from retail and some institutional investors. This demand creates tension with Vanguard’s conservative stance. The compromise of opening trading without advice is essentially a balancing act between client needs and corporate philosophy. This “passive openness” strategy allows the company to avoid missing market opportunities while leaving room for future policy shifts.

The contradiction of a $12 trillion giant and the maturing crypto market

Although Vanguard’s attitude shift is limited, its significance is profound. As the second-largest asset manager globally, every decision by Vanguard influences industry trends. Its move to open crypto ETF trading implicitly acknowledges that these products meet minimum standards and regulatory requirements. Even if internally they still view Bitcoin as speculative, the maturity of market infrastructure has compelled adjustments.

The Labubu analogy may be harsh, but it also reveals the cognitive gap between traditional finance and the crypto world. For Vanguard, assets without cash flow are considered speculative; for Bitcoin believers, money itself does not need cash flow. This fundamental philosophical divide is difficult to reconcile in the short term, but the market will provide answers over time and data. As Bitcoin experiences more economic cycles and its role in portfolios is validated over longer periods, conservative institutions like Vanguard may reconsider their stance.