The Wells Fargo Investment Institute, the research arm of the Wells Fargo Wealth and Investment Management, has published a report highlighting the potential of cryptocurrencies as an investment opportunity similar to the early stages of the Internet.
In a report published on Monday entitled “Cryptocurrency – Too Late or Too Early?” The banking giant has called cryptocurrencies a “viable investment”, but has indicated that investors are slow to enter the still mature market. Wells Fargo’s global investment strategy team said they disagreed with the idea that it is too late to invest in crypto, given that space is “relatively small” for other asset classes.
According to the banking giant, the technology behind cryptocurrency is on an adoption path similar to the Internet in the early to mid-1990s, when “consumers still needed time to learn what technology was, what it could do.” and how it works. “can benefit them.” However, as with the Internet, the growing number of cryptocurrency users indicates that “the world is beginning to embrace technology – and fast.” According to a study by Crypto.com in July, the number of crypto users worldwide more than doubled from 100 million in January 2021 to 221 million in June.
“If this trend continues, cryptocurrencies may soon emerge from the early adoption phase and enter a turning point due to over-adoption, as is the case with other technologies,” the report said. “There comes a point where the adoption rate starts to rise and you do not look back […] Regardless of the exact numbers, there is no doubt that the use of cryptocurrency around the world is growing and may soon reach an extreme inflection point. “.
Source: Wells Fargo Investment Institute.
The report added that the removal of regulatory barriers is also necessary for further adoption, noting that the environment is slowly changing to “make cryptocurrencies an investment asset.” The Wells Fargo team has advised potential cryptocurrency users to be patient and take advantage of special places to invest, such as available coin types for vehicles that are “slightly delayed and still mature”. However, “high-quality investment opportunities” may soon emerge if regulatory barriers are removed.
“There is no reason to rush, since most of the opportunities are ahead of us, not behind […] We hope that regulators will soon approve mutual funds and ETFs supported by the same digital assets – perhaps as early as 2022.”
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From October 2021, the Wells Fargo Investment Institute has provided advice and guidance on over $ 2.1 trillion in assets. The company announced last year that it intends to attract qualified investors to its crypto-investment platform.