Bitcoin ETF Brokerage Snub Reveals Ongoing Legacy Tensions

• Major brokerage firms refuse to offer Bitcoin ETF products.
• The crypto community is calling for a boycott of firms that refuse to offer BTC ETFs. 
• Bitcoin price action failed to meet expectations of a “God candle.” 

On January 10, the U.S. Securities and Exchange Commission approved spot Bitcoin ETF products , marking a major milestone for the crypto industry. However, the launch of trading the next day was met with confusion and outrage as several major brokerages, including Vanguard, announced that they would not offer spot Bitcoin ETF products to their customers.

Some Major Brokerages Say No to Bitcoin ETFs

Leading the retreat, Vanguard announced that they had no plans to offer spot Bitcoin ETF products due to these investment vehicles not aligning with the company’s core investment focus. 

Reading between the lines, Adam Cochran, partner at Cinneamhain Ventures, interpreted Vanguard’s snub as a misguided take on morality, which contradicts the firm’s position on offering bonds from countries with appalling human rights abuses.

Rip VanWinkle, managing director at Swan Bitcoin, highlighted that other major brokerages have followed Vanguard’s lead in refusing to offer spot Bitcoin ETF products, including Citi, Merrill Lynch, and UBS, with another 𝕏 user adding Bank of America into the mix.

In response to the snub, prominent crypto voices, including crypto YouTuber Scott Melker , have called on Bitcoiners to boycott these brokerages by moving their assets to more progressive platforms willing to facilitate Bitcoin ETF products.

While the brokerage boycotts represent another roadblock to crypto adoption, the lackluster Bitcoin price performance post ETF approval has only added to investor frustrations.

BTC Price Fizzles Out

Rather than surge on expected ETF-driven inflows, Bitcoin recorded a lackluster performance on the first day of ETF trading. January 11 saw BTC top out at $49,000 to record a two-year high. However, the widely expected “God candle” did not materialize, leading to Bitcoin sinking to $45,500 by 17:00 UTC.

Pondering what happened, Chris Burniske, partner at VC firm Placeholder, drew parallels with the Coinbase IPO in April 2021, which was also a major milestone moment for the industry but resulted in a multi-quarter top for the Bitcoin price.

Samson Mow, founder of Jan3, called for patience as it takes time for the effects of ETF buying to impact the underlying asset.

On the Flipside

• Compliance requirements mean brokerage firms can take weeks and months to make new products available.
• British HODL predicts Vanguard will reverse its decision to snub BTC ETC products.

Why This Matters

The reluctance of major brokerages to embrace SEC-approved Bitcoin ETFs highlights the continued barriers cryptocurrencies face in being truly accepted in the mainstream financial system. The denial of access due to perceptions of risk and uncertainty may stagnate broader adoption and integration of digital assets. The resultant customer boycotts are expected to light a fire under slow-to-adapt institutions.

Read about calls for an investigation into the SEC’s mishandling of Bitcoin ETF approvals here:
SEC’s Bitcoin ETF Handling Draws Criticism, FBI Probe

Discover Andrew Bailey’s opinion on crypto’s impact on mainstream adoption here:
Crypto Adoption “Not Taking Off:” Bank of England Governor