Another large American bank is poised to introduce a cryptocurrency fund, despite the recent drop in the value of Bitcoin. Wells Fargo said Wednesday it would introduce professionally managed funds for its wealthiest clients.
In a report, its investment institute said that the risks associated with digital currencies meant that it would favor “qualified investors.” It came as the price of Bitcoin fell after China said it was imposing new restrictions on cryptocurrencies. The value of the digital currency fell to less than $ 34,000 (£ 24,030) for the first time in three months on Wednesday, prompting a sell-off of other digital currencies, including Ethereum and Dogecoin.
In a report titled “The Investing Rationale for Cryptocurrencies,” the Wells Fargo Investment Institute (WFII) said it viewed digital currencies as an alternative investment. WFII believes that cryptocurrencies have gained stability and viability as assets, but risks lead us to favor investment exposure only to qualified investors, and even then through professionally managed funds,” he said. It is the latest in a series of large American banks to start trading.
In March, investment bank Morgan Stanley became the first major US financial institution to offer wealth management clients “high risk tolerance” access to Bitcoin funds. Bitcoin as the cryptocurrency becomes more common. JPMorgan Chase is also preparing to allow some select clients to invest in actively managed funds for the first time, trade publication Coindesk reported in April.
Bitcoin fell on Wednesday after China decided to ban financial institutions and payment companies from providing services related to cryptocurrency transactions. He also warned investors against speculative cryptocurrency trading. Bitcoin had already suffered sharp drops last week after Elon Musk said that he would no longer accept payments for Tesla cars in the currency.