- Actively managed crypto trading to be available to qualified investors in mid-June
- In December, the bank said clients could not hold crypto, but times have changed
Wells Fargo Investment Institute, which went public with its new crypto strategy today, one of the most volatile days for cryptocurrencies in the recent months.
According to an Insider interview with Wells Fargo Investment Institute president, Darrell Cronk, the bank will offer a “professionally managed solution” to its wealthy clients in mid-June.
The bank’s crypto strategy research is led by the institute’s global manager research team, which is headed by Greg Maddox, according to the article which was posted today.
A viable investment asset
In a special report on the investment rationale for cryptocurrencies, the bank said, “We believe that cryptocurrencies have evolved into a viable investment asset. There are over 9,000 cryptocurrencies, with $2.4 trillion in capitalization (as of May 7, 2021), and this depth and breadth allow additional analysis of their trends.1 Short-term factors suggest further deepening of the market. We believe long-term supply and demand trends support further industry growth, the potential for further compression in price volatility, and a possible role as portfolio diversifiers.”
Today’s news is directly opposite to what John LaForge, head of real asset strategy for Wells Fargo Investment Institute, told media attending a 2021 outlook briefing in December. Then the bank said its analysts did not have a crypto recommendation and that clients could not hold crypto at Wells Fargo.
Wells Fargo joins Citigroup, Goldman Sachs, BNY Mellon and JPMorgan as one of the big names in finance that have recently announced plans to expand into digital asset investment vehicles and services.
Timing is everything
However, the bank’s news dropped on one of the most volatile days and weeks for crypto currencies in recent months. Some attribute the plummet to Elon Musk’s u-turn on allowing bitcoin for Tesla purchases last week.
Bitcoin plummeted as much as 30% to around $30,000 Wednesday before recovering around 10%. Ethereum plummeted 19% while Dogecoin fell 20% to 38 cents.
As traders rushed to sell, Coinbase and Binance experienced outages in the US morning trading hours — with Coinbase being down for one and a half hours.
The largest digital currency was trading at around $38,000 at time of publication, according to CoinGecko.