Wells Fargo, the San Francisco-based financial services company has released a report titled, “The investment rationale for cryptocurrencies”. Amidst the volatility and hype regarding cryptocurrencies in the market, the company has decided to come up with a strategy to invest wealthy client’s money in the crypto market.
The report states that 9000 cryptocurrencies in the market with a $2.4 trillion market cap present a unique opportunity for investors because of many reasons. Firstly, because now banks have regulatory permission to custody crypto, and the investment industry and regulators have taken additional steps to extend a legal and oversight framework that would help solidify cryptocurrencies as investable assets. The COVID-19 pandemic has also played a role in fast-tracking the economy which has bought people a step closer to understanding the market.
After doing due diligence the financial services believe the risks of investment can be understood and opportunities identified. With due diligence, the market can become a potential market for alternative investment.
The report considers cryptocurrencies as a viable option for investment by qualified investors. The crypto market does not promise any fixed returns or dividends but when viewed closely crypto appears to be developing into fundamental short- and long-term price drivers.
Cryptocurrencies have become all the hype in recent times as banks like Morgan Stanley have started to give their clients wealth management access. NYDIG, an asset manager is also working with major banks to give access to crypto trading through a single bank account.
JPMorgan Chase & Co is also preparing to let certain clients invest in an actively managed cryptocurrency (Bitcoin) fund for the first time, CoinDesk had reported in April.