Vanguard warns of 'idiosyncratic risk' in cryptocurrencies' wild ride

Vanguard Group's chairman is keeping a watchful eye on gyrations in Bitcoin and its rivals. "The cryptocurrency trading that's going on right now actually worries me a little bit," F. William McNabb said in an Bloomberg TV interview in Beijing. "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." The largest digital currency was little changed at 10:15 a.m. in London, Bloomberg composite pricing showed. Bitcoin's 21% swoon in the first three weeks of 2018 has stirred a debate about whether it will stand up to regulatory scrutiny and if the correction is evidence of a speculative bubble bursting. Asked if the bursting of the bitcoin bubble could destabilize markets, Mr. McNabb said, "I don't think it's systemic, it's a strong idiosyncratic risk." "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 said. Mr. McNabb's visit to China comes after he ceded the role of chief executive officer of the $5 trillion asset manager to Tim Buckley this month. Vanguard is seeking opportunities in China's opening to foreign financial services companies. Beijing said it plans to remove ownership limits on banks and allow overseas firms to take majority stakes in local ventures. (More: State regulators warn investors about cryptocurrency dangers)