IlluMyFi

Bloomberg analyst predicts Vanguard may shift its anti-Bitcoin stance amid market changes and the need for diverse portfolios. Vanguard, a renowned investment firm, is speculated to shift its longstanding anti-Bitcoin stance, according to insights from Bloomberg's senior analyst Eric Balchunas. Despite Vanguard's current direction, Balchunas hints at possibly reevaluating this policy in the foreseeable future, aligning with the firm's expanding advisory services and the need for diverse investment portfolios. Vanguard's current approach towards Bitcoin and cryptocurrencies remains firmly resistant. The firm has recently made headlines by restricting customer access to the newly introduced spot Bitcoin Exchange-Traded Funds (ETFs). This decision aligns with their past actions, notably removing Bitcoin futures ETFs from their platform. According to a Vanguard spokesperson, this move aligns with the company's core values, focusing on products and services catering to long-term investors' needs. This stance, however, has not gone without consequence. Recent reports indicate that some Vanguard customers have started transferring their funds to other firms, seeking investment opportunities in the burgeoning cryptocurrency market. Despite these developments, Vanguard continues to uphold its cautious approach towards digital assets, reflecting the cautious perspective of its founder, Jack Bogle, who in 2017 labeled Bitcoin as a "plague." While Vanguard maintains its conservative stance, Eric Balchunas of Bloomberg foresees a gradual change in the company's philosophy. Balchunas notes that the growing emphasis on wealth growth and the necessity for diversified investments could nudge Vanguard towards reconsidering alternative asset classes like Bitcoin and other cryptocurrencies. This shift, he suggests, would be a strategic move to broaden their advisory business and cater to an evolving investment landscape. Balchunas's perspective is noteworthy, given the increasing institutional interest in cryptocurrencies. This trend is seen in contrast to Vanguard's current trajectory, but it highlights the dynamic nature of investment strategies in response to market demands and opportunities. Intriguingly, Vanguard's investment portfolio presents a contrasting picture. Despite its skepticism towards cryptocurrencies, the firm has significantly invested in MicroStrategy shares. MicroStrategy, known for its substantial Bitcoin holdings, is a key crypto player. As of September 2023, Vanguard holds over 1 million shares in MicroStrategy, valued at approximately $547 million, making it the second-largest institutional shareholder with an 8.24% ownership share. This investment is particularly notable given MicroStrategy's status as the leading public holder of Bitcoin, with an estimated 190,000 BTC valued near $6 billion. Vanguard's substantial stake in a company deeply entrenched in cryptocurrency raises questions about its investment strategy and potential openness to digital assets.

Sentiment

Bearish/Bullish

12.01.24 09:57

by coingape.com

Citi's Crypto Division Revenue Dips, Layoffs Underway

Citi on Friday reported a net loss of $1.8 billion for the fourth quarter of 2023 and said it plans to reduce headcount in the near-term. Banking giant Citi on Friday reported a net loss of $1.8 billion for the fourth quarter of 2023 as compared to a year ago profit of $2.5 billion. The bank also said that it plans to reduce its headcount in the future. The revenue for the quarter of Citi's wealth segment, which contains its crypto arm saw a decline of 3% to $1.7 billion. Citi reported a loss of $1.8 billion for the final quarter of 2023. The banks' quarterly revenue came in at $17.4 billion, a 3% plunge from a year ago. Citi attributes its loss to higher expenses and higher cost of credits incurred in the period. The wealth segment of the bank also saw a 3% decline in revenue for the quarter to $1.7 billion. Citi's wealth branch houses its' digital asset branch. The drop in the segment's revenue came on the back of lower deposit spreads, the bank said in a statement. The American multinational investment bank and financial services corporation also plans to reduce its workforce in the medium term as a part of the corporation's restructuring program. The job cuts will likely impact around 20,000 people, the bank added. Citi's job cuts also come at a time when finical sectors across the world are opting for headcount reduction. Recently, investment banking behemoth BlackRock Inc. also announced that it will lay off 3% of its workers. Virtual currency investors usually have a preference for using crypto platforms over traditional banking institutions. This has likely caused a widening relationship between crypto firms and traditional banks. For example, the largest cryptocurrency exchange in the world, Binance, had announced that it would temporarily halt deposits and withdrawals of US dollars using bank accounts. In general, banks are apprehensive to deal with digital assets, particularly in the absence of consistent rules overseeing the emerging sector. Banks' primary concern is to stay in the financial system. However, if they believe they may be excluded for taking excessive risks, they won't take them in the first place. However, crypto firms are susceptible to working in an unregulated environment, giving them an edge in luring clients who are interested to invest in digital assets. Banks on the other hand, feel that the advantages of cryptocurrency trading outweigh the rising threats to business and regulations. Citi had forayed into digital tokens to cater to institutional clients back in October of 2023. But, despite all guarantees and promises, investors still seem to be attracted towards crypto firms over banks for trading virtual currencies. The banking crisis in the world have been much evident for the past two years. One after the other, banks have shut down or have been facing some sort of financial crunch. One such shocker to the crypto markets was the fall of Silvergate bank. The crypto-friendly bank collapsed after reporting a loss of $8.1 billion in the Janua...