Bitcoin (BTC) rebounded strongly by nearly 10% within 24 hours after Vanguard suddenly lifted its ban on trading Bitcoin ETFs, with the price breaking above $93,000, marking one of the strongest rallies of the quarter. This surge has been dubbed the “Vanguard Degen Effect” by the market, reflecting the rapid influx of conservative capital into the crypto market following the lifting of restrictions.
Bitcoin’s rally began at the US market open on Tuesday, with the price surging toward $91,000 and triggering a massive liquidation of leveraged short positions, further fueling the market’s upward movement. Against this backdrop, Vanguard announced it would allow trading of crypto ETFs including Bitcoin, Ethereum, XRP, and Solana, ending its multi-year ban on crypto.
Market analyst Eric Balchunas pointed out that Vanguard’s move is one of the core reasons behind Bitcoin’s surge. He stated that with the ban lifted, pent-up demand from Vanguard clients was quickly unleashed. Previously, Vanguard had maintained an extremely conservative stance on Bitcoin ETFs and refused to provide purchase channels for clients, causing many investors to shift their funds to competitors like Fidelity.
Following the ban’s removal, the speed of institutional capital inflow far exceeded expectations. BlackRock’s IBIT saw trading volume surpass $1 billion within 30 minutes, while Bitcoin ETF trading volume on Vanguard’s platform also soared to $1 billion in half an hour, described as “astonishing.” Analyst Crypto Rover added that IBIT alone saw over $1.8 billion in volume within two hours, indicating that new capital is moving in rapidly.
Despite the bullish market sentiment, institutional perspectives remain cautious. Balchunas noted that the current rally may stem from the rapid release of previously suppressed demand, but it has yet to be determined whether this will drive long-term, systemic institutional inflows. If conservative retirement funds continue to flow into spot ETFs like IBIT, Bitcoin could enter a new cycle of liquidity expansion; but if this is merely a one-time surge, the market heat may cool off quickly.
As of now, Bitcoin is trading at approximately $93,562, with a 24-hour gain of nearly 10%. With Vanguard reopening crypto ETF trading, the line between traditional finance and crypto assets is becoming increasingly blurred, and the shift in institutional capital’s attitude is becoming a key driver of market trends.
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