Can You Buy Crypto on Vanguard? Here’s What You Need to Know
Vanguard has been a reliable investment platform for years, but can you buy crypto on Vanguard?
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Introduction
At Vanguard, we don’t invest in cryptocurrencies. Here’s what our experts have to say about this new asset class.
Cryptocurrencies, virtual currencies, and digital assets are all the rage these days. They’re often in the news, and you might be wondering whether you can buy them through Vanguard.
The short answer is no—we don’t invest in cryptocurrencies. We don’t think they’re a good fit for our clients’ portfolios. Here’s why:
Cryptocurrencies are unregulated, highly volatile, and vulnerable to cybersecurity threats.
Cryptocurrencies aren’t backed by any government or central bank. There’s no guarantee that you’ll be able to convert them back into cash, or that their value will hold up if you do convert them. In fact, their prices have been incredibly volatile—swinging widely from day to day, and sometimes from hour to hour. For example, the price of bitcoin fell by more than 25% in one 24-hour period in January 2018.1 And that’s not unusual: The digital currency has experienced several such swoons over the past few years.2
What’s more, cryptocurrencies are particularly vulnerable to cyberattacks—which could result in a complete loss of your investment. In fact, more than $1 billion worth of cryptocurrency has been stolen by hackers in the past few years.3 So if you do decide to invest in digital assets, be prepared to lose all your money—and then some.
What is Vanguard?
Vanguard is one of the world’s largest investment companies, with more than $5 trillion in global assets under management. The company offers a wide range of investment products and services to individual investors, institutions, and financial advisors. Vanguard is headquartered in Malvern, Pennsylvania, and has more than 20 million investors worldwide.
What is Crypto?
Cryptocurrency is a digital or virtual asset designed to work as a medium of exchange that uses cryptography to secure its transactions, to control the creation of additional units, and to verify the transfer of assets. Cryptocurrencies are decentralized, meaning they are not subject to government or financial institution control. Bitcoin, the first and most well-known cryptocurrency, was created in 2009. Since then, thousands of other cryptocurrencies have been created. These are often called altcoins, as a contraction of bitcoin alternative.
Can You Buy Crypto on Vanguard?
Vanguard is one of the biggest names in investing, and they offer a variety of products and services for investors. One thing that Vanguard does not offer, however, is the ability to directly purchase cryptocurrency. So if you’re looking to buy crypto through Vanguard, you’ll need to take a indirect approach.
There are a few ways to do this. One option is to purchase a Vanguard mutual fund or ETF that invests in companies involved in the blockchain or cryptocurrency space. This would give you exposure to the crypto market without actually owning any cryptocurrency yourself. Another option would be to use a service like Coinbase or Gemini that allows you to link your bank account with their platform and then use that platform to purchase cryptocurrency. Once you own cryptocurrency, you can then transfer it to a wallet of your choice.
While Vanguard doesn’t allow direct purchases of cryptocurrency, there are still ways to get exposure to the market through their products and services. Talk to a financial advisor about the best way to do this depending on your individual goals and risk tolerance.
Conclusion
In conclusion, you cannot buy cryptocurrency directly on Vanguard. However, you can buy Vanguard mutual funds that invest in companies involved in blockchain technology and cryptocurrency. These include the Vanguard Information Technology Index Fund (VGT) and the Vanguard Small-Cap Growth Fund (VBK), both of which have positions in companies such as Square (SQ) and Riot Blockchain (RIOT).
