Wells Fargo Set to Offer Professional Crypto Fund to Qualified Investors

The bank’s decision and its subsequent effects indicate the precipice of change the financial landscape sits on currently.

By
Robert D. Knight
on
May 21, 2021
Category:
Blockchain News

The Plan

Wells Fargo is set to move in on crypto, with the investment bank prepared to offer an investment product for its wealthiest clients from June. President Darren Cronk recently explained why the organization, which had previously been so crypto-sceptical, has now decided to change its position..

In an interview with Business Insider 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.” 

This positivity was followed by Cronk further asserting his belief in crypto as a portfolio asset:

 “For those investors who qualify and have an interest, there's some good academic and money-management work to suggest that it can be a nice diversifier to portfolio holdings."


Gold Rush Fever

Wells Fargo’s entry into crypto marks a reversal of position for the bank which remained publicly resistant to crypto even late last year. In an investment report dated December of 2020, John LaForge, the head of Wells Fargo’s ‘real asset strategy’, said: 

“Most investors have heard of cryptocurrencies, but few have ever bought or used one.” 

LaForge also compared cryptocurrencies to the “early days of the 1850’s gold rush,” but conceded that, “cryptocurrencies could become investment-worthy one day.” 

Six months later, that day has arrived, with Wells Fargo now set to pick up its metaphorical gold pan and pickaxe and FOMO right in.

Source unknown. Not a snapshot of a Wells Fargo board meeting

The Buffet Link

Investment firm Berkshire Hathaway has sold almost all of its shares in Wells Fargo. Just days ago it was revealed that the investment firm, which is led by Warren Buffet, recently sold the bulk of its 52 million shares in the bank. In a filing to regulators on March 31st, the investment firm declared that it now owns a mere $26 million of Wells Fargo stock, down from $1.58 billion in December of 2020, and down further still from $32 billion in early 2018.

In a 2018 interview Buffet described Bitcoin as “rat poison squared” and his position on cryptocurrencies has not mellowed since. While no explicit link can be drawn between the dumping of Wells Fargo shares and the bank’s crypto reversal, the timing of the bank’s change of heart is notable.


Final Thoughts

While this development is good news for crypto enthusiasts, there are some questions that arise from Wells Fargo’s decision. Berkshire Hathaway dumping their shares indicates that many traditional finance figures still fail to see the value of crypto, which is a sentiment that could play a role in future governance of the sector. While direct causation is difficult to attribute, it can be implied that the company softening its stance on crypto could lead to the company being black-listed by the funds that control large portions of the U.S market. If this FUD surrounding crypto is a continued trend, it could either lead to lowered adoption - or to drastic, sweeping changes to finance as we currently know it.


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Robert D. Knight

Robert D. Knight is an experienced journalist and copywriter who has been working in crypto for 4+ years. His bags are heavy in ETH and BTC, plus he also hodls some smaller cryptocurrency.

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