For years, Vanguard was crypto's biggest holdout. While competitors like Fidelity, Schwab, and Robinhood listed Bitcoin ETFs, the world's second-largest asset manager refused to touch digital assets. As recently as January 2024, Vanguard famously blocked clients from buying the newly launched spot Bitcoin ETFs.

That era is over. Starting December 2, Vanguard opened its $11 trillion platform to cryptocurrency ETFs and mutual funds—a seismic shift that signals crypto has officially entered the mainstream.

What Changed

Vanguard will now allow trading of most crypto ETFs and mutual funds that meet regulatory standards. This includes:

  • Spot Bitcoin ETFs from BlackRock (IBIT), Fidelity (FBTC), and Grayscale (GBTC)
  • Spot Ethereum ETFs from major issuers
  • Multi-asset crypto funds holding Bitcoin, Ethereum, Solana, and XRP

The company explicitly excluded meme coin-related products and stated it has no plans to launch its own crypto funds.

Why Vanguard Finally Caved

The official explanation focuses on client demand. "We serve millions of investors with diverse needs and risk profiles," said Andrew Kadjeski, Vanguard's head of brokerage. "We aim to provide a platform that gives our clients the ability to invest in products they choose."

But the real story is competitive pressure. Vanguard was hemorrhaging clients to rivals that offered crypto access. The appointment of Salim Ramji as CEO in mid-2024—formerly of BlackRock's iShares division—signaled the shift was coming.

BlackRock's iShares Bitcoin Trust (IBIT) has grown to roughly $70 billion in assets, making it the most successful ETF launch in history. Vanguard clients who wanted exposure had to open accounts elsewhere. That's no longer necessary.

What This Means for Crypto

Vanguard's capitulation removes one of the last major barriers to crypto adoption among traditional investors:

Legitimization: Vanguard built its reputation on low-cost, long-term investing. Its acceptance of crypto ETFs signals that digital assets have passed institutional scrutiny—at least as a portfolio option.

Access: More than 50 million Vanguard brokerage accounts can now access crypto through a familiar interface. No separate exchanges, no wallet management, no new platforms to learn.

401(k) implications: While Vanguard hasn't announced crypto in retirement plans, this move opens the door. If crypto ETFs prove stable enough for brokerage accounts, retirement accounts may follow.

Should You Buy Crypto ETFs?

Access doesn't equal endorsement. Before adding crypto to your portfolio, consider:

Volatility is extreme: Bitcoin fell 17.5% in November alone. Ethereum dropped 22%. These aren't small fluctuations—they're gut-wrenching swings that test investor resolve.

Correlation with stocks: Crypto increasingly moves with risk assets. During the recent selloff, Bitcoin fell alongside tech stocks. It's not the uncorrelated hedge some hoped for.

Fees matter: Crypto ETFs charge higher fees than index funds. IBIT charges 0.25% (with a current promotional rate of 0.12%). That's cheap for crypto, but expensive compared to Vanguard's total stock market fund at 0.03%.

A Reasonable Approach

If you're curious about crypto but cautious about risk, consider:

1. Keep it small: A 1-3% portfolio allocation provides exposure without bet-the-farm risk. Bank of America recently told institutional clients that 1-4% is reasonable.

2. Use it for speculation, not savings: Only invest money you can afford to lose entirely. Crypto remains speculative despite institutional acceptance.

3. Prefer Bitcoin over altcoins: Bitcoin has the longest track record and deepest liquidity. If you're dipping a toe in, start with the most established asset.

4. Don't chase performance: The worst time to buy is after a big run-up. If prices have surged, wait for a pullback rather than FOMOing in at the top.

The Bottom Line

Vanguard's crypto reversal marks a milestone in digital asset adoption. The last major holdout has opened its doors. For investors who wanted crypto exposure through their existing brokerage, that's now possible.

But access isn't a recommendation. Crypto remains highly volatile, largely speculative, and poorly understood by most investors. Vanguard's move makes it easier to buy—it doesn't make it safer to own.

If you choose to invest, do so with eyes open and position sizes small. The crypto revolution may be real, but so are the risks.