Coinspeaker
Wells Fargo on Track to Offer Crypto Investment to Wealthy Clients

Wells Fargo & Co (NYSE: WFC) is exploring possibilities to offer actively managed crypto strategies to wealthy investors. In a report entitled “investment rationale for cryptocurrencies”, Wells Fargo mentioned that their decision was informed by the stability and viability of crypto as an asset. Also, the risk involved guides the plan to start with only qualified investors.

“Wells Fargo believes that cryptocurrencies have gained stability and viability as assets, but the risks lead us to favor investment exposure only for qualified investors, and even then through professionally managed funds,” said in the report.

Darell Cronk, the president of Wells Fargo confirmed that this development has been in the pipeline for months now, and will likely be launched in mid-June. He stated that the crypto space has hit an evolutionary stage, and the matured state of its development makes it a viable investable asset.

As claimed by Cronk, the crypto market is an investment alternative rather than a strategic allocation. The company with almost $2 trillion assets led by John LaForge, head of real asset strategy in December 2020 disclosed that Banks do not recommend Bitcoin to all levels of clients because of the lack of infrastructures to hold these speculative assets.

The announcement comes after an unusual confluence of bearish fundamentals caused a precipitous fall of the Bitcoin price to hit below $34,000 before taking a swift rebound to around $40,000. Bitcoin and altcoins have responded strongly to the reports of the Chinese government reiterating crackdowns on cryptos. Despite investors’ efforts to scoop Bitcoin at the struggling price, almost all the leading altcoins are still in the red.

Other US Banks Joining the Craze

In March, Morgan Stanley (NYSE: MS) became the first US bank to offer its wealth management clients a high-risk tolerance access to Bitcoin funds. In addition, JPMorgan Chase & Co (NYSE: JPM) has revealed its intention to offer an actively managed Bitcoin fund to certain clients. Bank of New York Mellon Corp (NYSE: BK) in a couple of months into the year also announced to have formed a new unit to help clients hold, transfer and issue cryptocurrencies.

According to NYDIG, a crypto custody firm, hundreds of US banks will soon be able to hold, sell and buy Bitcoins through existing accounts. This company is a subsidiary of $10 million New York-based asset manager Stone Ridge and has partnered with Fidelity National Information Service to help US banks in their Bitcoin offerings. Hundreds of banks have already signed up on the program as claimed by the report.

Yan Zhao, president of NYDIG believes that banks have shown interest in Bitcoin because of the high demand observed from users sending dollars to Coinbase and other crypto exchanges.

“This is not just the banks thinking that their clients want bitcoin, they’re saying `We need to do this because we see the data,” Zhao said.

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Wells Fargo on Track to Offer Crypto Investment to Wealthy Clients