Wells Fargo Report: Global Crypto Adoption May “Soon Reach a Super Inflection Point”

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 similar to the early days of the internet.

In a report on Monday titled "Cryptocurrencies - Too Early or Too Late?", the banking giant called cryptocurrencies "viable investments" but suggested that investors don't have to rush into the still-maturing market. Wells Fargo's global investment strategy team said it disagrees with the view that it is "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 the internet in the early to mid-1990s, when "consumers still needed time to figure out what this technology is, what it can do, and how it can benefit them." However, like the internet, the increase in the number of crypto users shows that "the world is beginning to embrace this technology — and fast." According to a July study by Crypto.com, the number of global 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 super adoption tipping point, just like other technologies,” the report said. “At a certain point, adoption starts to rise and it doesn’t go back… Leaving aside the precise numbers, there is no doubt that global cryptocurrency adoption is on the rise and may soon reach a super adoption tipping point.”

Source: Wells Fargo Investment Institute

The report adds that removing regulatory barriers is also necessary for greater adoption, noting that the environment is slowly changing to “solidify cryptocurrencies as investment assets.” The Wells Fargo team advises potential cryptocurrency users to be patient and use private placements for investments, as the types of instrument currencies available are “a bit behind and still maturing.” However, if regulatory barriers are cleared, “higher quality investment options” may soon become available.

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

Wells Fargo Investment Institute provides guidance and advice on more than $2.1 trillion in assets as of October 2021. The company announced last year that it plans to bring accredited investors to its cryptocurrency investment platform.

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