According to a Wells Fargo report, global crypto adoption could “soon reach a hyper-inflection point.”

According to the firm’s global investment strategy team, it is not too early to invest in cryptocurrency, but clearing regulatory hurdles will likely result in “higher quality investment options” in the future.

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 investment opportunity comparable to the early days of the internet.

The banking giant referred to cryptocurrencies as “viable investments” today in a report titled Cryptocurrencies — Too Early or Too Late?, but hinted that there was no rush for investors to enter the still maturing market. Wells Fargo’s global investment strategy team stated that it is not “too late to invest” in cryptocurrency because the space is “relatively young” in comparison to other asset classes.

According to the banking giant, crypto technology is following a similar adoption path to the internet in the early-to-mid 1990s, when “consumers still needed time to figure out what the technology is, what it can do, and how it can benefit them.” 

However, as with the internet, the growing number of cryptocurrency users indicates that “the world is beginning to embrace the technology — and quickly.” According to a July study, the global crypto user base has more than doubled from 100 million in January 2021 to 221 million in June.

“If this trend continues, cryptocurrencies, like other technologies, may soon exit the early adoption phase and enter an inflection point of hyper-adoption,” according to the report. “At some point, adoption rates begin to rise and do not reverse […] Aside from precise numbers, there is no doubt that global cryptocurrency adoption is increasing and may soon reach a tipping point.”

The report went on to say that removing regulatory barriers was also necessary for increased adoption, noting that the environment was gradually changing to “solidify cryptocurrencies as investment assets.” The Wells Fargo team advised potential crypto users to be patient and invest through private placements because the types of currency available “are a bit behind and still maturing.” However, if regulatory hurdles are overcome, “higher quality investment options” could emerge soon.

“There is no need to rush because the majority of the opportunity is ahead of us, not behind us […] We are hopeful that regulators will soon approve mutual funds and ETFs backed by digital assets — possibly as early as 2022.”

The Wells Fargo Investment Institute provided guidance and advice on more than $2.1 trillion in assets as of October 2021. Last year, the company announced plans to bring qualified investors onto its cryptocurrency investment platform.


Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.

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