In a report focused on investment methodology, released earlier this week, the San Francisco, California-headquartered bank pointed out that Bitcoin (BTC) has risen 170% in 2020 and outclassed both gold and the S&P 500 Index.
Nevertheless, Wells Fargo seems to have underestimates the function performed by cryptos in the financial market, stating “they attract lots of attention, but not necessarily lots of investment money.”
The report says:
“Cryptocurrency investing today is a bit like living in the early days of the 1850’s gold rush, which involved more speculating than investing.”
Wells Fargo further stated that cryptocurrencies could turn out to be worthy of investment someday. Going forward, next year, the bank intends to discuss “the digital asset space more.” Even though Wells Fargo appreciated the sharp increase in cryptocurrency market cap to over $560 billion, it was apprehensive of investing in Bitcoin and called it as a “volatile journey.”
As per data provided by AssetDash, Bitcoin’s market cap sits at about $350 billion, approximately thrice that of Wells Fargo’s $120 billion at the time of publication. Certain estimates published two weeks before even placed the numero uno crypto’s market cap greater than that of JP Morgan.
Wells Fargo pointed out that the market cap of the entire crypto sector is currently about one-fourth of all of the S&P 500.
The published report signifies a systematic change in the bank’s point of view on cryptocurrencies in the last two years. Back in 2018, the bank had prohibited its clients from buying cryptos using its credit cards. Even though the report highlights the rage in the crypto market, it also mentions that cryptos are here to stay, arguing that “Fads don’t typically last 12 years.”