A Vanguard executive compares Bitcoin to a digital Labubu

John Ameriks does not believe in Bitcoin. The Vanguard executive even compares it to those viral Labubu plush toys. Surprising, when you know that the financial giant actually allows its clients to trade crypto ETFs on its platform. A revealing inconsistency of the persistent discomfort in traditional finance.

A Vanguard executive slams Bitcoin despite its openness to crypto ETFs

John Ameriks does not mince words. At Bloomberg’s “ETFs in Depth” conference in New York, the global head of quantitative equity management at Vanguard delivered a scathing critique of Bitcoin. According to him, the queen of cryptos does not present either cash flows or the solid fundamentals that the company traditionally seeks for its long-term investments.

His reference to Labubu plush toys is not accidental. These collectible toys, which recently went viral, symbolize for him the purely speculative dimension of bitcoin.

“I find it hard to consider Bitcoin as anything other than a digital Labubu“, he said. He also highlights the lack of tangible evidence demonstrating that blockchain technology brings real lasting economic value.

This comparison is part of a long tradition of critiques. Bitcoin has often been compared to the Dutch tulip bulbs of the 17th century or the Beanie Babies of the 1990s. 

These analogies aim to denounce what critics perceive as a speculative bubble fueled by scarcity rhetoric rather than solid economic fundamentals.

The recent market volatility reinforces these concerns. After reaching highs of more than 126,000 dollars in October, bitcoin now trades around 90,000 dollars. 

This nearly 29% drop in a few weeks recalls the unpredictable nature of this asset. For Ameriks, bitcoin could eventually prove its value during periods of high inflation or political instability. However, the history is too limited to justify a clear investment strategy.

A strategic change under new leadership

The contrast is striking. Vanguard, which manages about 12 trillion dollars in assets, long resisted cryptocurrencies. 

The company maintained a closed position regarding digital assets for years. Yet it made a 180-degree turn by allowing its clients to trade crypto ETFs on its brokerage platform.

This change coincides with the arrival of Salim Ramji at the head of Vanguard in 2024. The new CEO, known for his openness to Bitcoin, has clearly influenced this strategic evolution. 

Clients can now buy and sell funds exposed to Bitcoin, Ethereum, XRP, and Solana. These cryptos are thus placed on the same level as traditional assets like gold.

Ameriks justifies this openness by the establishment of historical performances for Bitcoin spot ETFs launched in January 2024. These financial products have demonstrated their ability to attract investors. Vanguard could not ignore this growing demand from its clientele.

However, the company maintains a cautious distance. “We allow users to hold and buy these ETFs on our platform if they wish, but they do so at their own discretion“, Ameriks specifies. 

Vanguard categorically refuses to give any advice regarding the opportunity to buy or sell cryptos. This “hands-off” approach reflects the institution’s persistent reservations towards these controversial assets.

In sum, the Vanguard case perfectly illustrates the current duality of the financial market towards Bitcoin. On one side, institutions adapt to their clients’ expectations and gradually open their doors to cryptocurrencies. On the other, strong reservations remain within the management teams themselves. This transition period testifies to a financial sector still divided on the real value of digital assets.