According to a survey by worldwide financial services major, Wells Fargo, it may not be too late to hop on the Bitcoin bandwagon because the top cryptocurrency is just getting to the inflection point of hyper-adoption.
Wells Fargo, a multinational financial services and banking conglomerate told investors on Monday that it did not believe it was too early to invest in bitcoin.
Investors should approach crypto investments through professionally managed private placements, according to the bank, which advises them to be “patient” while the market matures.
Wells Fargo’s Global Investment Strategy Team wrote in research that crypto users are fast increasing around the world. Crypto appears to be approaching a “hyper-adoption phase,” comparable to the internet’s mid-to-late 1990s period.
The report “Understanding Cryptocurrency” aims to address the debate over whether it is too early or too late to invest in cryptocurrency. Through its global investment strategy team, Wells Fargo believes that cryptocurrencies are suitable investment vehicles, but they are still in the early stages of their investment evolution cycle.
Taking A Leaf Out Of The Internet’s Book
Wells Fargo feels crypto is “early, but not too early” in the investment stage, emphasizing the importance of investor education while also comparing crypto adoption rates to those of the internet at the turn of the century.
Wells Fargo has a long history with the cryptocurrency business. Its research builds on its remarks from last year when it declared cryptocurrency a “viable investment asset” and said that it would begin offering a “professionally managed solution” to its wealthiest clients.
In August, the banking behemoth registered a passive bitcoin trust with the US Securities and Exchange Commission (SEC). Between 1996 and 2000, the number of people using the internet increased from 77 million to 412 million.
By 2010, the number had risen dramatically to 1.98 billion, with 4.9 billion people using the internet today. As a result, despite Bitcoin’s leading cryptocurrency having grown at a compounded annual rate of 216 percent since its first transaction in 2010, Wells Fargo believes it’s not too late to join the party.
Shakeout events are common in the early phases of investment, according to the report, and cryptocurrencies are no exception, with at least 1,700, or 40%, going bust following the 2017 shakeout event.
“As many a dot-com firm and investor can attest from 20 years ago, early-stage investing is often riddled with severe boom and bust cycles.”
According to the report, “there are over 16,000 cryptocurrencies in existence now, and if history is any indicator, many will fail (or at least fail to scale).”
Bitcoin was at a significant inflection point in its adoption path in December 2020, according to on-chain analyst Cole Garner, as institutional investors joined.
