In an investment strategy report released yesterday, the banking giant noted that Bitcoin (BTC) is up 170% this year and outperformed both gold and the S&P 500 Index. However, Wells Fargo seemingly understated the role cryptocurrencies are currently playing in the financial market, saying “they attract lots of attention, but not necessarily lots of investment money.”
“Cryptocurrency investing today is a bit like living in the early days of the 1850’s gold rush, which involved more speculating than investing,” said the report.
Wells Fargo noted that crypto assets may be worth investing in “one day” and added the bank would be “discussing the digital asset space more” going into next year. Though Wells Fargo said that crypto’s market capitalization had grown to more than $560 billion, it called investing in BTC a “volatile journey.”
According to data from AssetDash, Bitcoin’s market capitalization sits at roughly $350 billion; almost triple Wells Fargo’s $120 billion at the time of publication. Some estimates from two weeks ago even put the crypto asset’s market cap higher than that of banking giant JPMorgan. Wells Fargo noted that the market cap of the entire crypto market is now roughly 25% of all of the S&P 500.
The report represents a gradual change in the financial institution’s stance on crypto since 2018, when the bank banned its customers from making crypto purchases using Wells Fargo credit cards. Though the report refers to the “craziness” of the crypto market, it also mentions that cryptocurrencies are likely to stick around, saying “Fads don’t typically last 12 years.”
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