On Monday, banking giant Wells Fargo released a report titled  "Cryptocurrencies — Too early or too late?" The goal of the report was to address a “common point of confusion regarding the future of cryptocurrencies as investments” - namely, whether it is either too early or too late to invest in these assets. They argue that although the landscape is still maturing, cryptocurrencies are a “viable investment” and appear to be near a “hyper-adoption phase, similar to that of the internet during the mid-to-late 1990s.”    

The report offers a rebuttal to investors who have taken a “too late to invest” stance on cryptocurrencies. In response to those who fear that these assets will not experience the same growth that they’ve shown over the last ten years, they highlight that the market is still maturing and that focusing too much on past performance can often be misleading. Because most cryptocurrencies launch at prices less than $1, compound growth numbers can be massive, which may scare new investors. They also note that the vast majority of cryptocurrencies are less than five years old and have a lot of room for maturation. They highlight that even bitcoin, which is “the oldest and arguably one of the least volatile cryptocurrencies,” remains “roughly four times more volatile than gold and a basket of global equities.”   

Wells Fargo sees cryptocurrencies in the “early but not too early” investment stage, arguing that they “have been following an adoption pattern similar to other new advanced technologies.” Using the internet as an example, they note that 12 years after its invention (from 1983 to 1995), only 14% of Americans and less than 1% of the world were using it. They added that “internet use surged from 77 million in 1996 to 412 million in 2000” and that by “2010, worldwide internet use had grown to 1.98 billion, and today sits at 4.9 billion.” Comparing cryptocurrency growth to that of the internet, they say “it appears that cryptocurrency use today may even be a little ahead of the mid-to-late 1990s internet…there is no doubt that global cryptocurrency adoption is rising, and could soon hit a hyper-inflection point.”  

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