Alternatives

On January 10, the SEC approved 11 spot bitcoin ETFs. Vanguard quickly made the decision to not offer a bitcoin ETF. The decision has been met with resistance from customers. Recently, CEO Tim Buckley provided more insight into this decision, given that this has been a constant source of inquiry.

Overall, the firm doesn’t believe that bitcoin is a suitable investment option for a retirement plan, given the asset’s volatility and speculative nature. Buckley also rejects the notion that bitcoin is a 'store of value’, pointing to its severe declines in the past and correlation with equities. For example, bitcoin dropped from $69,000 to $16,000 between 2021 and 2022, while the S&P 500 was down 21% during this period from peak to trough.

Buckley added that he doesn’t believe that Vanguard will offer a bitcoin ETF until something significantly shifts in the asset class. In contrast, Vanguard only invests in asset classes with underlying cash flow. With equities, this refers to the future earnings of a company. For bonds, it can be calculated through a bond’s coupon and principal. Since bitcoin has failed to function as an effective ‘store of value’ and generates no cash flow at the moment, it remains purely a speculative asset, which makes it inconsistent with Vanguard’s principles and ethos. 


Finsum: Vanguard is not offering a bitcoin ETF, unlike many of its major competitors. CEO Tim Buckley shared why bitcoin is more of a speculative asset and unfit for long-term investing. 

The U.S. has an extended history of periods of financial regulation, specifically trust-busting. That period has been in hibernation though for the last 50 years, that is, until now. Many judges in the United States may be getting a slue of cases related to similar topics with mergers and competition as Private Equity has extended its ownership to unprecedented levels. There is more alignment than ever within the administration on the future of competition and private equity when it comes to policy. They are pursuing new readings and interpretations of longer-standing precedents that will be more stringent on PE. This new strain of regulation has long-standing Democratic Economists like Larry Summers voicing concern, calling the new policies ‘populist antitrust’.


Finsum: There have been a large number of papers on the effect of co-ownership and competition that private equity companies are imposing, and that could be reaching its peak.

According to a new survey by the alternative investment platform AssetTribe, the demand for alternative investments is expected to grow by up to 46% over the next 12 months. The research showed that the growth in demand for alternative assets is due to the current rate of inflation, an increasing need to diversify portfolios, and the potential for higher returns. The survey was conducted with over 580 sophisticated investors across the UK and Europe. According to the survey, the most popular alternative assets were real estate at 75%, long-term asset funds at 62%, and carbon net zero funds at 51%. The survey also showed that the wealthiest participants invested far more in alternatives than those with smaller portfolios.


Finsum: Due to inflation, diversification, and the potential for higher returns, the demand for alternative investments is expected to rise almost 50% over the next 12 months.

Page 6 of 13

Contact Us

Newsletter

Subscribe

Subscribe to our daily newsletter

Top