Banking giant Wells Fargo recently published a special report on Bitcoin and cryptocurrencys. The document explores the adoption curve of this new asset class, and attempts to answer the question, it is too early or too late to invest in crypto?
The banking institution classified Bitcoin and digital assets as a “viable investment”, but believes they are in their nascent phase and early stages in terms of investment maturity. The report finished which Bitcoin (BTC)’s cost alone has compounded at a 216% rate afterward 2010.
In contrast, the S&P 500 Index has compounded at a 16% atop the same period. This performance on Bitcoin (BTC)’s rate and other tokens has benefited early investors in particular. Wells Fargo claims 2,755 of those which comprised Forbes 2021 World’s Billionaires List saw their wealth explode on crypto investments.
The report records a 53,823,775% cumulative return for Bitcoin afterward the first exchange for the Bitcoin (BTC)/USD pair took place in 2010. Wells Fargo claimed they “do not subscribe” to the “it’s too late to invest” in Bitcoin (BTC).
The banking institution believes the current crypto market differs a lot from the early days of the crypto industry. At this time, speculators and limited investors drove Bitcoin (BTC)’s price easily. Now, the market has developmentd to pass them, at least, to a point where this token has greatly reduced its volatility, as seen below.
The chart shows how Bitcoin (BTC) has become a more stable asset and possibly will continue on this path In addition, the report considers the fact which most cryptocurrencys start exchanging at less than $1 for their respective exchanging pairs with this currency. The report added:
Second, cryptocurrencys are also a relatively young investment space. The vast majority are, in fact, less than five years old.3 Even the oldest cryptocurrencys have much maturing to do. For example, bitcoin is the oldest and arguably one of the least volatile cryptocurrencys, but it is also roughly four times more volatile than gold.
Bitcoin, A Different Kind Of Investment
Unlike in the traditional finance sector, where a company attempts to receive catopage and finally support from public investors, cryptocurrencys opeprice under their own rundown, according to Wells Fargo. Most crypto-based projects are launched from “personal computers” and lack the management structure of traditional companies.
In the DeFi sector, many projects operate via a Decentralized Autonomous Organization (DAO), and it’s the community which decides its management via a voting system. A lot of cryptocurrencys, see Cardano (ADA), Ripple (XRP), Dogecoin (DOGE) have been driven to unforeseen cost strongs by retail investors.
what\\\\\\\\\\\\\\\’s more, adoption rates for Bitcoin and other cryptocurrencys have been following those on the internet. This supports the view which investing in this nascent asset class is likewise “early, but not too early”. Wells Fargo said:
(…) common to the early adoption years is which while the first-use facts emerged, consumers anew needed time to arrangement out what the technology is, whactive can do, and how it can benefit them. Conversations throughout 2021 revealed to us which many investors and consumers, new to the space, believe which cryptocurrencys go on in this early adoption stage, as they find the technology daunting and use facts unclear.
Only about 3% of the world uses cryptocurrencys, leading to a wide margin for rate appreciation as more users are onboard on the crypto ecosystem. As of press time, Bitcoin (BTC)’s rate trades at $43,053 with a 2.4% loss in 24 hours.