Wells Fargo Investment Institute’s global investment strategy team stated that it is not too early to invest in cryptocurrency. However, clearing regulatory hiccups might create “higher-quality investment options” in the coming years.
The research division of Wells Fargo Wealth and Investment Management released a report highlighting the different potentials that come with crypto as an investment opportunity similar to the early days of the internet.
In a February 7, 2022 report titled “Cryptocurrencies — Too early or too late?” the banking behemoth referred to cryptos as “viable investments,” but mentioned that there was no rush for the investors to enter the currently maturing market.
Wells Fargo’s global investment strategy group mentioned that it did not subscribe to the idea that it was “too late to invest” in cryptocurrency, given that the space is quite young when compared with the other asset classes.
Based on the banking giant, the technology behind crypto is going on an adoption path that is similar to that of the internet in the early-to-mid 1990s. Those were the years when:
“Consumers still needed time to figure out what the technology is, what it can do and how it can benefit them.”
Nevertheless, just like the internet, the growing number of crypto users indicates that the world is starting to embrace nascent technology rapidly. Based on a Crypto.com study from July 2021, the total number of global crypto users more than doubled, surging from 100 million in January 2021 to 221 million in June.
The report stated:
“If this trend continues, cryptocurrencies could soon exit the early adoption phase and enter an inflection point of hyper-adoption, similar to other technologies. There is a point where adoption rates begin to rise and do not look back […] Precise numbers aside, there is no doubt that global cryptocurrency adoption is rising, and could soon hit a hyper-inflection point.”
This report further stated that the elimination of regulatory roadblocks was also crucial for greater adoption, noting that the environment was gradually changing to enhance the status of cryptos as investment assets.
The Wells Fargo team advised all the potential crypto users to remain patient and use various private placements for investments, as the types of vehicles currency available are still behind and maturing. Nevertheless, “higher-quality investment options” might soon arise in case regulatory hurdles get cleared.
“There is no need to rush, as most of the opportunity lies before us, not behind us […] We are hopeful that regulators may soon approve mutual funds and ETFs backed by the digital assets themselves — may be as soon as 2022.”
As of October last year, the Wells Fargo Investment Institute provided guidance and advice on over $2.1 trillion in assets. The company said in 2021 that it aims to onboard qualified investors to its crypto investment platform.