US's Largest Bank Wells Fargo Invests Bitcoin

JAKARTA - Wells Fargo, the third-largest bank in the US, has taken a bold step by investing in one of the new Bitcoin Exchange-Trad Fund (ETF) products. This action marks a major shift towards the adoption of Bitcoin by financial institutions.

According to a 13F-HR form report filed on Friday, Wells Fargo has an exposure of $143 million through three different Bitcoin investment products through March 31. The majority of the funds are held in the Grayscale Bitcoin Trust (GBTC), a Bitcoin spot ETF which directly guarantees its shares with a fixed amount of Bitcoin (BTC). In addition, Wells Fargo also has a position in Bitcoin Depot's Bitcoin ATM and ProShares Bitcoin Strategy ETF (BITO) provider, an ETF Bitcoin futures.

Although the total amount of this investment is only a small fraction of the total assets managed by Wells Fargo of US$603 billion, the crypto community welcomes this move as proof of the wider adoption of Bitcoin by financial institutions.

In 2018, Wells Fargo banned crypto purchases with credit cards, but analysts are now acknowledging the rapid growth in Bitcoin adoption and potential price appreciation in the coming years.

Wells Fargo chose to offer Bitcoin ETF as an investment option for his clients since February. Since its launch in January, Bitcoin spot ETF in the US has absorbed 11.8 billion US dollars in net flow. Other major financial institutions have also disclosed a massive allocation to Bitcoin ETF. One of the biggest holders is Susquehanna International Group, an investment company with AUM of USD 438 billion, which holds USD 1.8 billion in Bitcoin ETF.

Interestingly, both Wells Fargo and Susquehanna chose to invest the largest in GBTC, which has higher management costs than its competitors. However, Grayscale is currently still the largest Bitcoin ETF, even though it's only on a thin margin. These funds have experienced a nearly non-stop outflow since 11 January.