American banking behemoth Wells Fargo says the current state of cryptocurrencies is comparable to the internet in the mid-to-late 1990s.
In a new special report, the financial giant advises patience for investors looking to jump into the still maturing crypto space.
“For today’s investor trying to figure out if we are early or late to cryptocurrency investing, looking at technology investing in the mid-to-late 1990s seems reasonable. At that time, the internet hit a hyper-adoption phase and never looked back. Cryptocurrencies appear to be at a similar stage today. Cryptocurrency investment options today, however, are still maturing and we advise patience…
We do not recommend any of the other current investment options, such as mutual funds, ETFs, grantor trusts, and individual cryptocurrency speculation. We are hopeful that greater regulatory clarity in 2022 brings higher-quality investment options.”
The report doubles down on comparing blockchain technology to the internet, suggesting that cryptocurrencies are following the internet’s path from adoption to hyper-adoption.
“Cryptocurrency adoption rates look to be following the path of other earlier advanced technologies, particularly the internet. If this trend continues, cryptocurrencies could soon exit the early adoption phase and enter an inflection point of hyper-adoption, similar to other technologies seen in Chart 3.
Notice in Chart 3 that there is a point where adoption rates begin to rise and do not look back. For the internet, that point was the mid-to-late 1990s. After a slow start in the early 1990s, internet use surged from 77 million in 1996 to 412 million in 2000. By 2010, worldwide internet use had grown to 1.98 billion, and today it sits at 4.9 billion.”
The Wells Fargo report suggests that cryptocurrency technology may even be further along than the internet of the late-nineties in terms of adoption.
“Chart 4 helps visualize why we believe that cryptocurrencies may have reached an adoption inflection point similar to where the internet was in the mid-to-late 1990s. Chart 4 compares global user growth between the internet, starting in 1993 (Chart 4, solid red line), and cryptocurrency users, starting in 2014 (Chart 4, dashed purple line).
Based on this comparison alone, it appears that cryptocurrency use today may even be a little ahead of the mid-to-late 1990s internet. Precise numbers aside, there is no doubt that global cryptocurrency adoption is rising, and could soon hit a hyper-inflection point.”Don't Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox
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