Wells Fargo Investment Institute, the research arm of Wells Fargo Wealth and Investment Management, has released a report highlighting the potential of cryptocurrencies as an investment opportunity akin to the early days of the internet.
In a report today titled Cryptocurrencies — Too Early or Too Late？, The banking giant called cryptocurrencies “viable investments” today, but hinted that investors were in no rush to enter the still maturing market. Wells Fargo‘s global investment strategy team said it disagrees that it’s “too late to invest” in crypto given the space is “relatively young. ” in terms of other asset classes.
According to the banking giant, the technology behind crypto follows a similar adoption path to the Internet in the early to mid-1990s, when “consumers still needed time to understand what technology was, what can do and how it can benefit them. However, like the Internet, the growing number of crypto users suggests that ”the world is starting to embrace the technology – and fast. According to a Crypto.com study from July, the number of global crypto users more than doubled from 100 million in January 2021 to 221 million in June.
“If this trend continues, cryptocurrencies could soon exit the early adoption phase and enter a hyper-adoption inflection point, similar to other technologies,” the report said. There‘s a point when adoption rates start to increase and don’t look back […] Hard numbers aside, there is no doubt that global cryptocurrency adoption is growing and may soon reach a hyper-inflection point.
The report added that removing regulatory hurdles was also necessary for greater adoption, noting that the environment was slowly changing to “consolidate cryptocurrencies as investment assets.” The Wells Fargo team advised potential crypto users to be patient and use private placements for investments, as the types of vehicle currencies available “are a bit behind and still maturing.” However, “better investment options” may soon emerge if regulatory hurdles are lifted.
“THERE IS NO NEED TO RUSH, BECAUSE MOST OPPORTUNITIES LIE IN FRONT OF US, NOT BEHIND US […] WE HOPE REGULATORS CAN SOON APPROVE MUTUAL FUNDS AND ETFS BACKED BY DIGITAL ASSETS THEMSELVES – POSSIBLY AS EARLY AS 2022.”
As of October 2021, the Wells Fargo Investment Institute offered advice and guidance on over $2.1 trillion in assets. The company announced last year that it plans to onboard accredited investors to its crypto investment platform.