Wells Fargo Report: Global Cryptocurrency Adoption May 'Soon to Reach a Super Inflection Point'

The Wells Fargo Investment Institute, the research arm of Wells Fargo Wealth and Investment Management, has released a report highlighting the potential of cryptocurrencies as an early-stage internet-like investment opportunity .

In a report on Monday titled "Cryptocurrencies—Too Early or Too Late?" In the report, the banking giant called cryptocurrencies a "viable investment" but suggested that investors need not rush into the still maturing market. Wells Fargo’s global investment strategy team said it disagrees with the notion that it’s “too late” to invest in cryptocurrencies, given their “relative youth” compared to other asset classes.

According to the banking giant, the technology behind cryptocurrencies is following an adoption path similar to that of the internet in the early to mid-1990s, when "consumers still needed time to figure out what the technology was and what it could do." , and how it can benefit them.” However, as with the Internet, the increase in the number of crypto users indicates that “the world is beginning to embrace the technology — and fast.” According to a July study by Crypto.com, global The number of crypto users more than doubled from 100 million in January 2021 to 221 million in June.

"If this trend continues, cryptocurrencies may soon exit the early adoption phase and enter a tipping point of hyper-adoption, just like other technologies. At some point, adoption starts to rise, and it won't go back... …Precise numbers aside, there is no doubt that global cryptocurrency adoption is on the rise and may soon reach a super tipping point.”

Source: Wells Fargo Investment Institute

Removing regulatory hurdles is also necessary for wider adoption, the report added, noting that the environment is slowly changing to "consolidate cryptocurrencies as investment assets." The Wells Fargo team advises potential cryptocurrency users to be patient and invest using a private placement, as the types of instrument currencies available are “a bit behind and still maturing.” However, if regulatory hurdles are cleared, "higher quality investment options" could soon emerge.

“There’s no need to rush because most of the opportunities are in front of us, not behind us...We expect regulators to approve mutual funds and ETFs backed by digital assets themselves very soon – possibly as soon as 2022.”

As of October 2021, the Wells Fargo Investment Institute provides guidance and recommendations for more than $2.1 trillion in assets. The company announced last year that it plans to introduce accredited investors to its cryptocurrency investment platform.

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