Wells Fargo Rolls Out Passive Bitcoin (BTC) Fund

Wells Fargo and JPMorgan have both submitted separate filings to the Securities and Exchange Commission (SEC) on August 19, 2021, for the launch of a passively-managed Bitcoin fund that will offer their wealthy clients exposure to bitcoin (BTC).

Wells Fargo Finally Joins the Bitcoin Movement 

After several months in the works, Wells Fargo, the 16th-largest lender in the world, has finally launched its Bitcoin fund. Contrary to earlier reports, the new investment vehicle is a passive bitcoin fund designed to offer its wealthy and institutional clients indirect exposure to the digital currency.

As stated in its Form D filing with the U.S. Securities and Exchange Commission (SEC), the 169-year-old bank has inked a partnership deal with New York Digital Investment Group (NYDIG) and FS Investments, a Philadelphia-based asset manager on the offering.

What’s more, Wells Fargo will get an undisclosed percentage from sales of the fund through two of its subsidiaries: Advisors Financial Network and Wells Fargo Clearing Services, though the fund is yet to execute any transaction at press time.

As reported by BTCManager on August 3, JPMorgan partnered with NYDIG for the launch of its private bitcoin fund. The megabank officially registered its bitcoin fund via a Form D Exempt Offering of Securities filing on August 19.  

Traditional Banks Seriously Embracing Crypto

Since the United States Office of the Comptroller of the Currency (OCC) gave federally chartered banks and financial institutions in the region the go-ahead to offer crypto custodial services, more and more banks have been making inroads into the cryptospace.

While HSBC, one of the world’s largest banks, recently barred its clients from purchasing the shares of MicroStrategy, a publicly-listed company with the largest bitcoin holding globally (over $3 billion), as a sign of its distaste for the revolutionary digital asset, other banks in its class have completely embraced bitcoin despite the lack of regulatory clarity still plaguing the industry.

As reported by BTCManager in July 2021, America’s oldest lender, Bank of New York Mellon (BNY Mellon), joined forces with State Street Corporation, and four other highly reputed firms to launch a new cryptocurrency exchange called Pure Digital.

In the same vein, on July 14, 2021, BNY Mellon signed a partnership deal with Grayscale, to enable the former to function as the asset servicing provider for the Grayscale Bitcoin Trust (GBTC).

At press time, the bitcoin (BTC) price is hovering around $47,111, with a market cap of $885.30 billion, according to CoinMarketCap.

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Wells Fargo Sets Up Passive Bitcoin Fund for Wealthy Clients

Wells Fargo investment bank has filed with the US Securities and Exchange Commission (SEC) for a private Bitcoin fund.

According to seekingalpha.com media outlets, Wells Fargo has registered for a passive Bitcoin fund with the US regulator to provide its wealthiest clients with an indirect vehicle for investing in cryptocurrency. 

However, the move contrasts with earlier reports that the bank would offer an actively managed crypto fund. Business Insider reportedly disclosed that Wells Fargo started offering cryptocurrency exposure to its wealthy clients earlier this month. In May, the bank revealed that its team was preparing to offer its clients an actively managed crypto solution.

The SEC’s filing indicates that Wells Fargo has partnered with NYDIG and FS Investments on the Bitcoin offering. Wells Fargo will obtain certain fees when its clients invest in the FS NYIG Bitcoin fund. Both asset manager FS Investments and Financial services firm New York Digital Investment Group (NYDIG) have been working together on Bitcoin investment funds in the past.

As of Thursday, August 19, the new fund, FS NYDIG Bitcoin fund, did not have any sales at Wells Fargo.

Meanwhile, JPMorgan Chase & Co also registered for a passive Bitcoin fund with the US SEC during that same day. The report shows that the bank partnered with NYDIG and will get a percentage of sales through subsidiaries. At the time of the filings, JPMorgan’s Bitcoin fund had not completed any sales.

Bank Clients Interested in Crypto

With the crypto move, Wells Fargo and JPMorgan have joined a rising number of investment banks that have offered crypto investments to clients, including Citigroup, Goldman Sachs, and Morgan Stanley.

The efforts by these major banks to launch access to funds that enable ownership of Bitcoin is a significant step for crypto acceptance as an asset class. This confirms that bank clients demand exposure to cryptocurrency.

Bitcoin’s rally put Wall Street firms under pressure to consider getting involved in the nascent asset class in the past year.

At least for now, major banks are only allowing their wealthy clients access to volatile assets.

This year, Morgan Stanley became the first major US bank to provide its wealthy clients access to Bitcoin funds in March. The bank considers Bitcoin as suitable for people with “an aggressive risk tolerance” who have at least $2 million in assets held by the bank.

Image source: Shutterstock


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As The Bitcoin Price Hits $45,000, Is The Next Bull Run Beginning?

With the bitcoin price hitting $45,000 and above, has the next BTC bull run begun?

Last Week In Bitcoin is a new segment covering the week that was in Bitcoin, including all of the important news along with some analysis.

It was the week we’ve been waiting for: We’ve spent most of the last week with the bitcoin price in the $40,000s, briefly seeing bitcoin eye $37,000 on Thursday before starting off its weekend run, which saw it break above $45,000 a few times as many asked themselves: Is this the start of the next bull run?

Timeline of the bitcoin price this week, with corresponding news items listed below.

Timeline of the bitcoin price this week, with corresponding news items listed below.

The News That Drove The Bitcoin Price

This week started off with a bang when finance giant NCR, which operates over 1 million ATMs worldwide, announced that it would acquire bitcoin ATM operator LibertyX (1), aiming to roll out bitcoin ATMs and point-of-sale (POS) systems across the globe. Pretty bullish, right?

Also, on Monday, Wells Fargo, the same bank that banned users from buying cryptocurrencies in 2019, started offering wealthy clients exposure to bitcoin and bitcoin-related investments (2).

Tuesday continued the week’s bullish trend when American fast food chain Quiznos announced it would start accepting bitcoin payments soon (4) and eligible users would receive $15 in bitcoin rewards, paving the way for more businesses across the U.S. to do the same. Despite once boasting over 4,700 outlets across the globe, the fast food chain currently has closer to 1,000 outlets, most of which are likely to start accepting bitcoin, per the news.

Also on Tuesday, Google finally lifted its 2018 crypto ad ban, meaning that companies will now be allowed to buy advertisements across the entirety of Google’s ad network (5). Later in the day, a Bloomberg Intelligence Report indicated that bitcoin was “on track” to hit $100,000 later this year. On Wednesday, Merchant Bank’s founder spoke on Yahoo! Finance calling bitcoin “massive” and a “must-have in your portfolio,” further spreading the bitcoin gospel (6).

Thursday brought some interesting news as well, with reports that JPMorgan would open a bitcoin fund to wealthy investors (7). This would be the same JPMorgan whose CEO, Jamie Dimon, has repeatedly bashed bitcoin over the years, saying bitcoin is a terrible store of value in 2014, saying it would go nowhere in 2016, calling bitcoin a fraud in 2017 and saying that he doesn’t give a sh*t about bitcoin in 2019. Turns out, Bitcoin is undeniable.

But for most of the week, the market was abuzz about the controversial U.S. infrastructure bill proposal, which included a section focusing specifically on regulating the tax payments around cryptocurrencies such as bitcoin. The bill’s author, Senator Rob Portman, admitted during the course of the week that wording in the bill was vague and would need some clarification (3).

The ongoing discussions regarding the section covering bitcoin stalled as the bill was debated, and it appeared that legislators will ultimately make changes in haste or push the bill through without doing so, which could have dire consequences for the U.S. If taxed inappropriately, bitcoin miners will leave the country, users will hide their bitcoin stashes and the U.S. will be set back years.

Overall, the phrase “buy the rumor, sell the news” became more apt by the day. Although the market did not seem very phased by this, if this bill does go through with onerous bitcoin taxing requirements, it may very well act as a catalyst for the start of the next bear market. Of course, that’s just my opinion.

Bitcoin Is Primed For A Pump

This past week was a breath of fresh air for Bitcoin, confirming my constant yammering over the last few months that bitcoin is primed for a pump. I remain firm in my opinion that bitcoin will continue to surge over the next few months and a six-digit price tag isn’t unlikely (even Bloomberg thinks so). There may be another few dips in the weeks or months to come, but we’re on a rocket that will pave the way for the future of finance.

Over a decade ago, just a week after the Bitcoin network went live, pioneer Hal Finney speculated that a single bitcoin could someday be worth $10 million. That’s still at least 20,000% upside, if you’re at all bothered with bitcoin’s pricing in fiat currencies. If you look at bitcoin’s performance over the last decade, then it’s clear as daylight that the next decade will be a spectacle.

I believe the U.S. infrastructure bill is something to keep a close eye on, and not just if you’re based in the U.S. or one of its territories. It will have long-term ramifications for the entire market, if it goes through in its original form — though that may not be likely to happen.

Bitcoin has gone from $0 to an asset with a nearly $1 trillion market capitalization in just over a decade. And that doesn’t include the platforms and services that have been built around bitcoin, its trading or expansion. Media, hardware and software companies, influencers, investors and more have built massive industries around Bitcoin.

Bitcoin isn’t going anywhere anytime soon, this week will just be another green candle in a sea of them…

This is a guest post by Dion Guillaume. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.


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Wells Fargo Now Offers Cryptocurrency Investment To Clients

Wells Fargo had announced earlier in the year that they planned to offer cryptocurrency investments to clients. Something that was referred to as a “professionally managed” cryptocurrency investment. Now the bank has announced that it will begin offering cryptocurrency exposure to its high net worth clients.

The Wells Fargo Investment Institute had been working on a way for it to be able to best offer its clients an option to invest in cryptocurrency. Following a re-evaluation on the bank’s stance on crypto. “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,” Darrell Cronk told Insider back in May.

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Cronk, who is the President of Wells Fargo, alluded to the market size of the crypto market making it a good alternative investment for clients. The solution had been in the works for months as the Wells Fargo Investment Institute, which is the investment-research division of Wells Fargo Wealth and Investment Management, devised a way to provide this service to investors.

Getting Clients Exposed To Cryptocurrency

Wells Fargo will only be offering crypto exposure to some clients as part of its wealth management. These clients consist of high-net-worth individuals who want to get more exposure to the market without having to buy into cryptocurrencies themselves.

Total crypto market cap chart from TradingView.com

Total crypto market cap chart from TradingView.com

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Total crypto market cap down following weekend rallying | Source: Crypto Total Market Cap on TradingView.com

Cronk revealed that this comes with “quite a bit of interest” from their clients. And Cronk’s strategy team has published the first-ever research report on cryptocurrencies by the institute.

“There’s a lot of education and informational work that has to be done. It is a complex topic, and while investors have interest, it is important that they understand it for what it is.” – Darrell Cronk, President, Wells Fargo

Banks Getting Into Cryptocurrencies

Wells Fargo is not the first bank to provide cryptocurrency exposure to its clients. Banks have reported that there continues to be increasing demand from clients for a way for them to get involved in digital assets. In fact, Wells Fargo comes behind a couple of big banks that have provided crypto investment options for their clients.

This survey carried out by Goldman Sachs revealed that 50% of the ultra-wealthy want increasing exposure to cryptocurrencies. To which Goldman Sachs has responded by offering clients the option to trade Bitcoin and Ether Options and Futures. Hopefully, other digital assets to be added to the mix.

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Big bank JP Morgan also ramped up investment in companies with Bitcoin exposure, banking on increasing demand for cryptocurrencies. While this deal between NCR and NYDIG will see customers be able to buy bitcoin across 650 banks.

As consumers demand more ways to get into the market, it is only natural to expect an influx of these types of products to help clients get more exposure to cryptocurrencies.

Featured image from Investor Junkie, chart from TradingView.com


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Wells Fargo Now Offers Bitcoin & Crypto Exposure To Wealthy Clients

Business Insider reports that wealthy Wells Fargo clients can now get Bitcoin & crypto exposure through the bank.

High-net-worth Wells Fargo clients can now get Bitcoin & crypto exposure, a company spokesperson informed Business Insider, making Wells Fargo the latest in a long line of traditionally conservative financial institutions to venture into Bitcoin.

In May, it was reported that the investment-research division of Wells Fargo Wealth and Investment Management was going to implement an actively managed Bitcoin and crypto strategy to its qualified investors.

The firm’s wealth and investment management arm oversees about $2 trillion in assets, making them among the largest wealth managers in the United States.

According to the research division’s president Darrell Cronk, the firm has been searching for “a professionally managed solution” for months, Business Insider reports. At the same time, Wells Fargo has been publicly wary of Bitcoin and other cryptocurrencies due to their regulatory vagueness.

In May, in an interview with Business Insider, Darrell Cronk commented, “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.”

Cronk went on to allude that the massive market cap of Bitcoin combined with other cryptocurrencies lent them legitimacy in his view.

However, Cronk told Business Insider he views crypto as an “alternative investment” instead of a “strategic allocation”, but one which “can be a nice diversifier to portfolio holdings.”

It is unclear at this time how exactly wealthy clients at Wells Fargo are going to get exposure to Bitcoin, whether it is through outright purchasing Bitcoin or through a second order of price exposure, such as Grayscale Bitcoin.

Wells Fargo’s Bitcoin venture comes just days after traditional banking giant JPMorgan’s CEO said clients “see bitcoin as an asset class and want to invest,” and before them, in March, Morgan Stanley announced that they too would offer clients solutions for owning Bitcoin.

Notably, Wells Fargo’s global-investment-strategy team’s report on the investment rationale for cryptocurrencies is a testament to their understanding of Bitcoin’s supply and scarcity dynamics.

Cronk commented, “Anytime you reduce the supply of anything, even if demand holds constant, it should increase the price. Over time, as people become more familiar with these and as they become more mainstream, I think it will naturally go up.”

Until the SEC approves a Bitcoin ETF, we can expect the actively managed crypto strategy at Wells Fargo to remain limited to qualified investors, namely, “an individual with an annual gross income of more than $200,000 or a net worth of more than $1 million,” according to Business Insider.

On the element of risk to Wells Fargo clients exposed to Bitcoin and other cryptocurrencies:

“There’s a whole element of consumer protections and regulations that have to still evolve with the changing landscape,” Cronk concluded, “we think there can be a viable investable option for those clients who show an interest.”


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Banks cautious about crypto ahead of COVID-19 testimony before US Senate

Major Wall Street bank executives will appear before the United States Senate Banking Committee on Wednesday to discuss the role of their financial institutions in the recovery of the American economy.

Democratic lawmakers plan to grill a number of major bank execs, whose firms saw record profits during the COVID-19 pandemic while average Americans struggled to make ends meet. 

In prepared testimonies posted on Tuesday, CEOs at the Bank of America, Citigroup and Wells Fargo described their respective banks’ responses to major challenges such as inequality, diversity, climate change, taxes, as well as how their banks handle cryptocurrencies. 

This year saw a record bull run in cryptocurrency markets as major financial institutions opened up to digital assets, adding trading desks and custody wings to handle client interests in major cryptos like Bitcoin (BTC).

In his testimony, Bank of America CEO Brian Moynihan said that the bank is continuing to evaluate the benefits, risks and client demand for crypto-related products and services. “Currently, we do not lend against cryptocurrencies and do not bank companies whose primary business is cryptocurrency or the facilitation of cryptocurrency trading and investment,” he said.

Moynihan said that BofA is also assessing new technologies like distributed ledger technology, which could potentially deliver value to the bank’s customers. However, while BofA holds over 60 blockchain patents, the bank still has “not found a use case at scale,” Moynihan said.

Similarly, Citigroup CEO Jane Fraser also outlined a measured approach to crypto, stating that the bank will need to ensure clear controls and governance before engaging with cryptocurrencies. “Citi is focusing resources and efforts to understand changes in the digital asset space and the use of distributed ledger technology, including demand and interest by our clients, regulatory developments and technology advancements,” Fraser wrote.

Wells Fargo CEO and president Charles Scharf said that the company has been closely following developments around cryptocurrencies. Digital assets “have emerged as alternative investment products though their status as a currency and mechanism of payment remains fluid,” Scharf noted. The exec also mentioned that Wells Fargo is preparing to roll out a pilot for a blockchain-based settlement service within the bank’s global branch network.

The Senate Banking and House Financial Services committees will also hear from the CEOs of JPMorgan, Goldman Sachs, and Morgan Stanley. The latter two introduced limited crypto services earlier this year, while the former is reportedly mulling opening a crypto trading desk.