Bloomberg’s senior ETF analyst Eric Balchunas has criticized Vanguard’s strict stance on crypto investment products, calling it an overprotective move against informed investors.

In a detailed post on X, Balchunas discussed Vanguard's decision to avoid the crypto market and block users from accessing approved Bitcoin (BTC) and Ethereum (ETH) ETFs in the United States. He encouraged the crypto community to accept Vanguard's decision and move forward.

Vanguard Reaffirms Its Crypto ETF Ban

On Wednesday, Vanguard reiterated its position by announcing it will not participate in the newly approved Ethereum ETFs, describing these funds as "more speculative than investment-worthy."

Vanguard made a similar statement when Bitcoin ETFs were authorized by the Securities and Exchange Commission (SEC) in January.

Balchunas emphasized that the industry should accept Vanguard's decision, noting that Vanguard is not a "typical asset manager."

He revealed that the firm has been experiencing nearly a billion dollars in daily inflows for over a decade and has no interest in competing in the crypto space.

Nevertheless, the senior ETF analyst believes Vanguard is making a mistake by preventing their investors from making their own choices and participating in the emerging crypto economy.

He pointed out that Vanguard has some of the most knowledgeable investors in the world who can make their own decisions.

"Personally, I think the ban is silly as it seems they are being overly protective. Their investors are the smartest money on the planet, not easily misled children; they can handle having choices," he wrote on X.

US ETF Market Thrives Without Vanguard

Despite Vanguard's ban on crypto ETFs, preventing its 50 million customers from accessing these funds, the newly launched investment products are thriving without the company.

While the market waits for the final approval of Ethereum spot ETFs from the SEC, Bitcoin ETFs now hold 4.29% of Bitcoin’s current supply.

Earlier this week, MicroStrategy’s former CEO Michael Saylor noted that Bitcoin ETFs globally have reached a significant milestone. Spot BTC issuers now collectively hold 1,002,343 BTC, with the US leading.

The eleven ETFs approved by the SEC recorded around $4.6 million on their first day of trading. Since then, these funds have outperformed other Bitcoin ETFs worldwide, including those in Hong Kong.

On Tuesday, BlackRock’s iShares Bitcoin Trust (IBIT) became the largest spot Bitcoin ETF in the US by assets under management (AUM), surpassing the Grayscale Bitcoin Trust (GBTC).

According to Bloomberg data, IBIT's AUM reached $19.68 billion, outperforming GBTC, which recorded around $19.65 billion. IBIT took the top spot with the remaining 10 ETFs close behind.

Initially, when the funds started trading, GBTC led with a massive volume of around $28.5 billion. However, IBIT eventually took the lead.