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Analysts at Wells Fargo Investment Institute (WFII), the advisor and subsidiary of Wells Fargo Bank, have asserted that cryptocurrency adoption is still in its early stages.
It’s Not Too Late to Buy Crypto
In a report published by WFII’s Global Investment Strategy team, the analysts noted that Wells Fargo does not believe it is too late to invest in crypto despite their rapidly rising prices.
“We understand the ‘too late to invest’ argument but do not subscribe to it. We believe that focusing too much on past performance, especially with cryptocurrencies, can be misleading to new investors,” they wrote.
The report pointed out that the crypto space is still a nascent industry, considering that most of the top coins were launched less than five years ago. They added that even the oldest cryptocurrency, Bitcoin, is still far from being fully matured.
Early But Not Too Early
Rather than considering cryptocurrency investments to be “too late,” the analysts categorized them as being in the “early but not too early” stage.
They noted that the adoption rate of crypto mirrors that of other new advanced technologies like the internet but on a much-advanced scale.
“We see cryptocurrencies in the ‘early, but not too early’ investment stage… Cryptocurrency adoption rates look to be following the path of other earlier advanced technologies, particularly the internet. If this trend continues, cryptocurrencies could soon exit the early adoption phase and enter an inflection point of hyper-adoption.”
Education and Regulatory Clarity Needed
The analysts emphasized that investors should learn as much as they can about the cryptocurrency space and the investment options that are available in the market.
They acknowledged that there are currently a limited number of crypto investment products available to investors, adding that the current exchange-traded products in the U.S. are backed by futures and not the digital assets themselves.
“We do not recommend any of the other current investment options, such as mutual funds, ETFs, grantor trusts, and individual cryptocurrency speculation. We are hopeful that greater regulatory clarity in 2022 brings higher-quality investment options,” the analysts said.
