Wells Fargo (WFC Quick QuoteWFC ) and JP Morgan (JPM Quick QuoteJPM ) are penetrating the $2-trillion worth Bitcoin arena as both companies recently registered a Bitcoin fund with the Securities and Exchange Commission.
Wells Fargo and JPMorgan are partnering with the New York Digital Investment Group (NYDIG), a pioneering technology and financial services firm. Both firms will get an undisclosed percentage of sales via its subsidiaries. Wells Fargo will get the sales through Wells Fargo Clearing Services and Wells Fargo Advisors Financial Network.
In case of JPMorgan, NYDIG will hold the cryptocurrency while the bank will be represented as a sales agent. In Wells Fargo’s case, the bank will also be functioning with FS Investments on the offering. Both funds were registered as passive funds despite initially expected to be actively managed.
The move follows the May 2021 news when Wells Fargo Investment Institute president Darrell Cronk had informed about the bank’s likely offering as a “professionally managed solution” to its wealthiest clients in the future, according to an Insider interview. Even JP Morgan had enabled its advisors to take orders to purchase and sell five cryptocurrency products, four from Grayscale Investments and one from Osprey Funds, per an internal memo in July 2021.
Until July 2020, the Office of the Comptroller of the Currency did not grant permission to banks to hold cryptocurrencies. The amendment post July gave banks the go-ahead to begin exploring cryptocurrency operations.
Thus, such an effort by both banks will likely boost the world’s most popular cryptocurrency asset’s prospects further, at least on the grounds that Wells Fargo and JP Morgan are enabling cryptocurrency access to their clients.
The banks’ move follow their peer Morgan Stanley’s (MS Quick QuoteMS ) endeavor to start offering clients access to three bitcoin funds as reported in March 2021.
Earlier in February, The Bank of New York Mellon Corporation (BK Quick QuoteBK ) became the first global custody bank to announce plans to form a new unit called Digital Assets to help its institutional clients hold, transfer and issue digital assets.
Shares of JP Morgan have gained 3.3% in the past six months while the Wells Fargo stock has rallied 26.8%.
Image Source: Zacks Investment Research
Both stocks presently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.