Wells Fargo Has Started Offering Bitcoin and Crypto Services to Wealthy Clients
Wall Street banking giant Wells Fargo has started offering Bitcoin and cryptocurrency services to its wealthy clients told a company spokesperson familiar with the matter.
The development comes within three days of America’s oldest bank State Street making a similar move. The banking institution started providing crypto asset fund administration capabilities for its private clients.
Bank in May 2021, there were reports that the investment-research division of Wells Fargo Wealth and Investment Management shall be implementing an actively managed crypto strategy for its institutional clients. Currently, the wealth and investment management of Well Fargo overseas over $2 trillion assets under its management. This undoubtedly makes it one of the largest wealth management companies in the U.S.
As reported by Business Insider, Wells Fargo has been already searching for a professionally managed solution for crypto assets for months. This was also confirmed by the Well Fargo research division president Darrel Cronk.
During an interview with BI back in May, Cronk said: "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.”
The President further noted that the massive market cap of Bitcoin and other altcoins brings more legitimacy to the asset class. However, Cronk sees cryptocurrencies as “alternative investment” instead of a “strategic allocation”. Thus, he sees Bitcoin as a nice diversifier for his portfolio holdings.
The bank hasn’t yet disclosed on how exactly does it plan to offer bitcoin exposure to its wealthy clients. Looking at the way other financial institutions have been offering, it could be through a Bitcoin derivative product like the Grayscale Bitcoin Trust.
The recent report from Wells Fargo’s global-investment-strategy team explaining the investment rationale in digital currencies is a major testament of the banks deep dive in understanding BTC supply and other dynamics.
Cronk said: “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.”
Currently, the offerings from Wells Fargo are limited only to qualified investors who is “an individual with an annual gross income of more than $200,000 or a net worth of more than $1 million”.
Once that the U.S. SEC approves the Bitcoin ETF we can expect more traditional players to start offering Bitcoin services to all class of clients.