Bitcoin’s year-over-year price rose by 170%, making it the most profitable investment asset of 2020. This finding contained in the report of Wells Fargo, the financial holding company that is part of the \”Big Four\” banks in the United States.
The cryptocurrency is given one section in the document. Its authors noted that over the past 12 years digital assets have \”grown from virtually nothing to a market capitalization of $560 billion\”.
“Short-term fascinations usually do not last 12 years,” Wells Fargo noted.
Despite the optimistic tone, the authors noted Bitcoin’s high volatility. They compared its three-year path with gold and the S&P 500: in 2017 the assets started from the same point and over the entire period showed broadly comparable trajectories, but in 2020 the line for the first cryptocurrency rose sharply.
Chart of Bitcoin, gold, and the S&P 500. Data: Wells Fargo.
“Until the last two months, three-year returns largely mirrored those of other asset classes, but volatility differed,” the analysts noted.
In their view, investing in digital assets resembles the early days of the 1850s gold rush, when speculation outweighed investment.
“However, someday cryptocurrencies will become worthy investments,” the authors concluded.
In 2018, Wells Fargo barred credit card holders from purchasing Bitcoin and other cryptocurrencies due to market volatility and the associated risks.
In 2019, the financial holding announced the launch of a pilot blockchain service for inter-branch settlements based on Corda Enterprise.
In 2020, Wells Fargo became the first American bank to invest $5 million in Elliptic, a blockchain-analysis service.
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