- Wells Fargo, one of the US’s top-tier banks, has filed with the SEC for its Bitcoin fund.
- The bank joins many other similar institutions that are venturing into the crypto sector including JP Morgan and Goldman Sachs.
One of the US’s top banks, Wells Fargo, intends to start offering cryptocurrency services soon. The bank has filed with the US Securities and Exchange Commission (SEC) to have its designated Bitcoin (BTC) fund. Wells Fargo will partner with the New York Digital Investment Group (NYDIG) and FS investment to float the Bitcoin fund. An unspecified percentage of sales from the subsidiaries Wells Fargo Clearing Services and Wells Fargo Advisors Financial Network will be channelled to the fund.
In May, Wells Fargo president Darrell Cronk had hinted at being the next giant financial institution to venture into crypto. He suggested that the rise in the value of the leading digital asset Bitcoin could signify the industry’s maturity. Cronk, however, did not go into details on the kinds of crypto products or services the firm would have.
Wells Fargo joins crypto bandwagon
With the move, Wells Fargo now joins JP Morgan in foraying the crypto industry. The latter has also filed with the SEC for a Bitcoin fund which it will offer in partnership with the NYDIG. Goldman Sachs also re-opened its crypto trading desk and files with the SEC for a Bitcoin ETF.
Another top-tier bank, BNY Mellon, also activated digital asset custodial and issuance services for its clients. Similar institutions deploying such services include Puerto Rico-based FV Bank and South Korean banks.
In March, Morgan Stanley became the first American big bank to offer its wealthy clients access to Bitcoin funds. Later on, the bank filed to offer Bitcoin exposure through institutional funds.
All these events point to widespread cryptocurrency adoption among banks. They also indicate increased demand for crypto-related services from the banks’ customers.
Banks and the crypto ecosystem
Nonetheless, these banks are likely hedging themselves against the potential extinction of traditional financial institutions. Banks are likely to be deemed obsolete with the rise of cryptocurrencies, decentralized finance, and other related projects. Preventing possible future irrelevancy brings the need for these institutions to channel their funds into crypto and crypto start-ups.
That said, Wells Fargo and JP Morgan’s approach to digital assets shows a lot of prudence. For instance, when JP Morgan began offering crypto services, it cautiously asked clients to consider adding crypto to their portfolios. The bank also advised that just 1 percent of their allocation could result in significant gains amid other risks.
Meanwhile, Bitcoin gained 7 percent Thursday to go above the $47,000 level, and back to the $50,000 track. At writing time, BTC was trading at $47,167, representing a 5.2 percent climb during the day, our data shows.