- Vanguard Group chairman F. William McNabb said Thursday that the ongoing cryptocurrency boom worries him “a little bit.”
- “If something’s too good to be true, it probably is,” he told Bloomberg TV.
Vanguard Group chairman F. William “Bill” McNabb remains hesitant about the cryptocurrency craze, he told Bloomberg TV on Thursday.
“The cryptocurrency trading that’s going on right now actually worries me a little bit,” he said from China. “I think there’s a lot of leverage, I think there’s a lot of speculation. If something seems to be too good to be true, it probably is.”
Vanguard, which controls about $US4.5 trillion worth of assets and is the world’s second-largest provider of exchange-traded funds (ETFs), is notably absent from the cryptocurrency space.
Cryptocurrency markets around the world were rocked this week when roughly 43% of the global market cap for the nascent space disappeared in the span of 24 hours. Prices are rebounding Thursday, with the flagship bitcoin back above the $US10,000 benchmark it fell below on Wednesday, but the “bloodbath” has brought an air of caution.
“I don’t think it’s systemic, it’s a strong idiosyncratic risk,” McNabb said of the slump.
Two blockchain ETFs debuted on Wednesday – one from Vanguard competitor Reality Shares – but not before the Securities and Exchange Commission requested the providers remove “blockchain” from the funds’ names.
ETF’s with a direct link to bitcoin have yet to hit the market, though they are considered the next natural step following the launch of Cboe Global Markets’ and CME Group’s bitcoin futures offerings in December. Both VanEck and ProShares withdrew their requests for bitcoin ETFs last month.
Despite the hesitancy, McNabb remains cautiously optimistic about blockchain, the underlying technology for bitcoin and all cryptocurrencies.
“I think the blockchain technology that underlies cryptocurrencies is one of the most exciting developments in technology and I think there’s all kinds of potential uses of it and applications that we’re just beginning to talk about,” he told Bloomberg.