Crypto markets are recalibrating after the sudden Vanguard Bitcoin ETF policy shift sent prices and volumes sharply higher across major digital assets.
Bitcoin rallies toward $94,000 after Vanguard lifts ETF ban
Bitcoin (BTC) jumped more than 6% on Wednesday, briefly pushing toward the $94,000 threshold during the early Asian session. The move came just hours after Vanguard lifted its long-standing ban on trading Bitcoin ETFs, reversing a position that had defined its crypto stance for years.
The powerful rally triggered one of the strongest intraday moves of the quarter and raised fresh questions about how much conservative capital could now enter crypto markets. Moreover, the surge arrived at a time when spot ETF flows were already a key driver of digital asset liquidity.
A sudden Bitcoin price spike as Vanguard flips its crypto stance
The Bitcoin price surged above $93,000 on Wednesday, adding over $200 billion to its market capitalization in just 36 hours. That pace of value creation underlined how sensitive the market remains to shifts in institutional access and sentiment.
The move began during the US opening on Tuesday, putting BTC on track for its biggest daily gain since May 2021. As the pioneer cryptocurrency approached $91,000, levered short liquidations accelerated, further amplifying the upside move and forcing traders to cover positions quickly.
According to ETF analyst Eric Balchunas, the surge reflects what he called the “Vanguard Effect,” unfolding on the first trading day after the firm removed its ETF ban. However, he also noted that it remains too early to tell whether the impulse will be sustained.
As first reported on December 1, Vanguard ended its years-long crypto ban and now allows trading of Bitcoin, Ether, XRP, Solana, and other regulated crypto ETFs and mutual funds. This access applies to customer accounts that previously had been restricted from buying such products.
This shift marks a dramatic departure from Vanguard’s previous position. For years, senior executives argued that crypto lacks intrinsic value, produces no cash flows, and does not fit long-term retirement strategies. Moreover, they framed digital assets as speculative tools rather than core portfolio holdings.
The firm rejected Bitcoin ETFs after their January 2024 debut and even restricted customer purchases of competing funds. However, from as early as January 2024, analysts had predicted that Vanguard would eventually soften its stance as flows into the sector grew.
Notably, Vanguard’s restrictive approach pushed many customers to redirect funds to rival platforms. The backlash from frustrated clients was swift and public, with some former investors posting accounts of their experience. The post criticizing Vanguard’s restrictions has since been removed.
Nonetheless, sustained client demand, combined with Bitcoin ETFs becoming one of the fastest-growing product categories in US fund history, forced a strategic reassessment. Vanguard now concedes that Bitcoin and crypto ETFs have been “tested and performed as designed through multiple periods of volatility.”
While the firm still refuses to launch its own crypto products or support meme coin-linked funds, opening trading access alone represents one of the most significant institutional shifts of 2025. That said, the decision also raises the stakes for how traditional investors respond to this new availability.
Institutional momentum surges through IBIT and Vanguard’s platform
Balchunas highlighted that BlackRock’s IBIT ETF reached $1 billion in trading volume within the first 30 minutes of Wednesday’s session. He suggested that Vanguard effectively rescued Bitcoin trading momentum just before the Christmas holiday period, when activity typically slows.
The wave of inflows was not limited to his observations. Analyst Crypto Rover argued that the price action was no mystery, pointing directly to Vanguard’s decision as the main driver behind the surge in institutional activity.
“This is why bitcoin pumped… Vanguard just lifted its Bitcoin ETF ban reversal, and a wave of new institutional investors rushed in through BlackRock’s $IBIT ETF. BlackRock’s $IBIT alone hit over $1.8 billion in trading volume within the first two hours,” he wrote, emphasizing the scale of IBIT trading volumes.
Separately, market watcher Vivek Sen reported that Bitcoin ETF volume on Vanguard exceeded $1 billion within the first 30 minutes of trading, describing the activity as “wild.” Moreover, his comments suggested that the broker’s client base had been waiting for the exact moment restrictions disappeared.
These rapid inflows indicate that a portion of previously blocked demand, including conservative, retirement-oriented investors who could not access spot products, likely entered the market as soon as the gate opened. However, it is still unclear how much of this demand represents a one-time allocation versus the start of a recurring flow.
One-off burst or the start of a larger trend?
Despite the excitement, analysts remain divided on whether the vanguard bitcoin etf reversal marks a structural change in institutional bitcoin demand. When asked if this is merely a short-term effect after the ban’s removal, or the beginning of a systemic flow of conservative capital, Balchunas urged caution.
“I doubt it. I think there’s a small % of ppl who were pent up. And it’s good to be on the platform and available. You never know when others may allocate. That said, you can’t rely on ETF Boomers for everything,” he warned, underscoring the limits of conservative investor flows as a sole growth engine.
The comment highlights a central tension: institutional-grade access to Bitcoin is expanding, yet the long-term behavior of traditional investors remains uncertain. Moreover, previous episodes of strong inflows have sometimes been followed by periods of consolidation or outflows.
Bitcoin, Ethereum, XRP, and Solana — the cryptocurrencies at the core of Vanguard’s new pivot — are rallying in response. BTC traded around $93,562 at the time of writing, up nearly 10% over the prior 24 hours as liquidity and sentiment improved.
If conservative capital continues to move into IBIT and other spot funds, the market could enter a fresh phase of liquidity expansion resembling earlier waves of bitcoin price surge momentum. However, if Wednesday’s spike mainly reflected the release of pent-up demand, the rally’s intensity may cool quickly as short-term flows normalize.
Either way, Vanguard’s policy reversal ensures that the wall between traditional finance and crypto has become significantly thinner, and investors are reacting quickly to the new set of choices now available.
In summary, Vanguard’s ETF access shift, combined with record IBIT volumes and a sharp move in BTC toward $94,000, has opened a new front in the debate over how durable bitcoin etf adoption among conservative investors will prove to be.