Vanguard Opens Bitcoin ETF Trading to 50 Million Clients as BlackRock CEO Predicts Tokenization Revolution

Major Institutional Shift Signals Crypto's Mainstream Acceptance

In a landmark reversal that underscores cryptocurrency's growing acceptance among traditional financial institutions, Vanguard announced it will now permit Bitcoin and digital asset ETF trading on its platform, opening access to more than 50 million brokerage customers^[1]. The decision comes as BlackRock CEO Larry Fink predicts that asset tokenization may trigger the biggest overhaul of financial markets since the 1970s^[2].

Starting Tuesday, Vanguard clients will be able to access funds with significant exposure to Bitcoin, marking a dramatic policy shift for the firm that had previously expressed concerns about the cryptocurrency's volatility and speculative nature^[1].

Responding to Investor Demand

The change follows sustained pressure from both retail and institutional investors seeking cryptocurrency exposure through regulated investment vehicles. Spot Bitcoin ETFs, which launched in January 2024, have accumulated substantial inflows, with BlackRock's IBIT ETF currently managing approximately $70 billion^[1].

"Cryptocurrency ETFs and mutual funds have been tested through periods of market volatility, performing as designed while maintaining liquidity," said Andrew Kadjeski, head of brokerage and investments at Vanguard^[1]. "The administrative processes to service these types of funds have matured; and investor preferences continue to evolve."

The decision comes more than a year after Salim Ramji, previously an executive at BlackRock, became Vanguard's chief executive officer^[1]. However, Vanguard clarified it has no plans to launch its own cryptocurrency products and will continue excluding funds tied to memecoins as defined by the Securities and Exchange Commission^[1].

Tokenization's Global Expansion

Meanwhile, BlackRock's Larry Fink highlighted a parallel development that could reshape global finance: the rapid expansion of asset tokenization. Fink noted that tokens representing real-world assets on blockchain have seen their capitalization surge roughly 300% in just the past 20 months^[2].

However, Fink warned that approximately 75% of tokenization adoption is occurring in developing countries "where banking access is limited," while traditional financial powerhouses are lagging^[2].

"Meanwhile, the economies that built modern finance – America, Britain and the EU – are falling behind, at least when it comes to where the trading is happening," Fink said^[2]. He cautioned that while American companies, particularly stablecoin issuers, are "best placed" to lead the tokenization shift, this "early advantage isn't guaranteed"^[2].

Convergence of Traditional and Digital Finance

Despite predicting "enormous growth over the coming decades," Fink emphasized that tokenization won't replace traditional finance immediately^[2]. Instead, he described it as a bridge "being built from both sides of the river, converging in the middle," with traditional financial institutions on one side and digital-first innovators on the other^[2].

"The two aren't competing so much as learning to interoperate," Fink said^[2].

Implications for the Industry

Vanguard's policy reversal represents a significant milestone for cryptocurrency's institutional adoption. The firm's decision to permit most Bitcoin and digital asset-focused ETFs and mutual funds that meet regulatory standards mirrors its approach for other specialized investment categories^[1], suggesting crypto products are increasingly viewed as legitimate investment vehicles rather than speculative outliers.

Combined with BlackRock's aggressive push into both Bitcoin ETFs and tokenization infrastructure, these developments signal that cryptocurrency and blockchain technology are transitioning from alternative investments to core components of the global financial system.