Business Insider reported on July 31 that Wells Fargo, a major US financial services company, has started offering crypto-assets investment products to its wealthy clients.
The company’s asset management division currently has assets under management worth $2 trillion. The company announced the decision in May that it would start offering crypto investment products.
Wells Fargo is the recent traditional establishment that has ventured into the crypto-space. The company currently offers only private placement bonds since the US Securities and Exchange Commission (SEC) has not approved any cryptocurrency ETFs.
Apart from this, services are limited to customers who have an annual income of at least $200,000 or net assets worth $1,000,000. The conditions are the same as the Grayscale Investment Trusts.
Wells Fargo research division Wells Fargo Investment Institute (WFII) had conducted research for “a professionally managed solution” to provide cryptocurrency investment products. In an interview with Business Insider, Darrell Cronk, Chairman of WFII noted:
“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.”
However, Cronk also mentioned that he perceives crypto as an “alternative investment” and it has not reached assets worthy of strategic asset allocation.
Wells Fargo has not offered clarity on how its wealthy investors will be exposed to Bitcoin. It is unclear if they will outright purchase the crypto asset or through a second order of price exposure.
“Anytime you reduce the supply of anything, even if demand holds constant, it should increase the price. Over time, as people become more familiar with these and as they become more mainstream, I think it will naturally go up.”
2021 has seen several institutions entering the crypto space and many have started offering cryptocurrency investment products for institutional investors. In late July, JP Morgan announced that it has started offering cryptocurrency investment trusts to its wealthy customers.