Wells Fargo has also joined in on crypto-mania. The financial services giant has started offering cryptocurrency exposure to its high-net-worth clients (HNWI), reported Insider, saying a company spokesperson has confirmed this.
In 2021, banks, hedge funds, mutual funds, pension funds, insurance companies, asset managers, and financial institutions, everyone from the traditional market has started warming up to cryptocurrencies.
In May, when it first became public, the investment-research division of Wells Fargo Wealth and Investment Management, Wells Fargo Investment Institute, was planning to evaluate and onboard an actively managed crypto strategy on its platform for its qualified investors.
This search for “a professionally managed solution” has been going on for months, said the research unit’s president Darrell Cronk at the time adding, the strategy was likely to be ready in June.
Wells Fargo’s wealth and investment management arm oversee about $2 trillion in assets.
Competitors JPMorgan and Morgan Stanley have also started offering their wealthy clients exposure to cryptocurrency recently.
“We think the cryptocurrency space has just kind of hit an evolution and maturation of its development that allows it now to be a viable investable asset,” Cronk told Insider in May but added that instead of a “strategic allocation,” he sees it as an “alternative investment.”
The financial institution also understands the importance of having a limited supply, with Bitcoin only going to have 21 million in supply ever, as Cronk noted that anytime supply is reduced, even if an asset’s demand holds constant, “it should increase the price.” Cronk said of cryptocurrencies,
“Over time, as people become more familiar with these and as they become more mainstream, I think it will naturally go up.”
“We’ve seen that happen quite consistently over the last decade, but we’ve seen it accelerate during the pandemic because there’s been more digitalization of platforms.”
With risks still present there, the bank will also focus on consumer protections and regulations. “So we’re not without risk, it’s just that we think there can be a viable investable option for those clients who show an interest,” Cronk said.
Wells Fargo has seen “quite a bit of interest” from clients.