Wells Fargo, one of the largest banks in the United States, has taken a significant step into the world of digital assets by investing in several Bitcoin-related products, according to a 13F-HR form submitted on Friday.
Wells Fargo investments were made across three different Bitcoin investment vehicles as of March 31.
The majority of these investments, worth $141,817 by March 31, were allocated to the Grayscale Bitcoin Trust (GBTC). In addition to GBTC, the banking giant also invested some small amounts in Bitcoin ATM provider Bitcoin Depot and ProShares Bitcoin Strategy ETF (BITO), a Bitcoin futures ETF.
While these investments represent only a fraction of Wells Fargo’s $603 billion in assets under management, they signal a significant move toward institutional Bitcoin adoption.
Notably, the filing comes at a time when the US House of Representatives approved a bill this week aiming to reverse SEC guidelines that mandates banks holding digital assets to list the assets as liabilities on their balance sheets.
The bill received 207 votes from Republicans and 21 votes from Democrats, passing with a total of 228 votes to 182.
Republican Representative Mike Flood stated that its purpose is to “ensure consumers are protected by removing obstacles that hinder highly regulated banks from serving as custodians of digital assets.”
Wells Fargo Investment in Bitcoin: A Shift in Stance
Wells Fargo’s allocation to Bitcoin ETFs marks a notable shift, especially considering its previous stance. In 2018, Wells Fargo temporarily banned digital asset credit card purchases. However, the recent investment reflects a growing recognition of Bitcoin’s rapid adoption and price appreciation.
Renowned Bitcoin investor Oliver L. Velez commented on this development, highlighting the irony of Wells Fargo’s prior decision to close his accounts in 2020 due to his significant bitcoin-related purchases. He added:
“They are all coming to Bitcoin. They have no choice. Game theory is at play now and it’s just getting started.”
Wells Fargo’s decision to invest in GBTC is notable, given that it is the most expensive option among Bitcoin ETFs, with a management fee of 1.5% per year.
This contrasts with competitors like BlackRock and Fidelity, which charge lower management fees of around 0.3%. Despite this, GBTC remains the largest Bitcoin ETF, primarily due to its pre-ETF launch bitcoin stack. However, it has experienced significant outflows since January 11.
Data from SoSoValue indicates that on May 10, total net outflows from spot Bitcoin ETFs reached $84.6581 million, marking the second consecutive day of outflows.
Grayscale Bitcoin ETF reported an additional $103 million in outflows on Friday alone. In contrast, BlackRock’s iShares Bitcoin Trust (IBIT) saw an inflow of $12.4363 million, and Fidelity’s FBTC experienced $5.3039 million in inflows.
Despite the outflows, the overall trend suggests growing interest in Bitcoin ETFs, with U.S. Bitcoin spot ETFs absorbing $11.8 billion of net inflows since their launch in January.
Major financial institutions like Susquehanna International Group, with $438 billion AUM, and BNP Paribas, Europe’s 2nd largest bank, have also disclosed substantial allocations to Bitcoin ETFs, indicating a broader trend of institutional investment in the digital asset.
