Another pair of big banks are broadening their cryptocurrency interests. Wells Fargo and JPMorgan have both registered a Bitcoin fund with the Securities and Exchange Commission.
Wells Fargo is partnering with the New York Digital Investment Group (NYDIG), a leading technology and financial services firm, and FS Investments on the offering. Wells Fargo will get an unknown percentage of sales through two of its subsidiaries: Wells Fargo Clearing Services and Wells Fargo Advisors Financial Network.
JPMorgan is also partnering with NYDIG and will also receive a percentage of sales through subsidiaries.
At the time of the filings, neither fund had completed any sales.
The two megabanks are the latest in a growing number that are slowly embracing cryptocurrencies. Earlier this year, JPMorgan cautiously recommended that investors consider adding Bitcoin to their portfolio, saying allocations of up to 1% of their portfolio could “achieve any efficiency gain in the overall risk-adjusted returns.”
JPMorgan Chase, Wells Fargo, and Goldman Sachs are also hedging their bets for the possibility of a bankless future by funneling millions of dollars into crypto startups. BNY Mellon announced plans earlier this month to form a new team that’s developing a custody and administration platform for traditional and digital assets. An investment unit of Morgan Stanley is also in the process of considering whether to bet on Bitcoin.
Banks, until 2020, didn’t really have a choice in the matter. The Office of the Comptroller of the Currency (OCC) did not give permission for banks to hold cryptocurrencies until last July. That shift gave banks the green light to begin exploring crypto operations.
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