Wells Fargo (WFC) Announces Investments in Bitcoin ETFs

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Per a regulatory filing, Wells Fargo & Company WFC has announced exposures to cryptocurrencies through investments in numerous Bitcoin exchange-traded funds (ETFs). The move indicates the increasing interests in digital assets among financial institutions.

Per the filing, Wells Fargo has purchased shares of Grayscale’s GBTC spot Bitcoin ETF, providing the bank with $141,817 exposure to the digital asset. Additionally, Wells Fargo has invested less than $1,200 in ProShares Bitcoin Strategy ETF (BITO). This offers investors exposure to Bitcoin futures contracts that will facilitate them to speculate on the future price movements of the cryptocurrency.

Moreover, the bank has a $99 exposure to Bitcoin Depot Inc., a Bitcoin ATM provider. While the company has forayed into the cryptocurrency space, its investments in these vehicles are relatively small.

This filing follows the news that WFC is looking to offer its wealth management clients the opportunity to invest in Bitcoin ETFs through brokerage accounts.

The company’s Wealth and Investment Management segment provides personalized wealth management, brokerage, financial planning, lending, private banking, trust, and fiduciary products and services to affluent, high-net-worth and ultra-high-net-worth clients.

In the last reported quarter, WFC reported total revenues of $3.7 billion from the segment, indicating a year-over-year increase of 2%. Also, total client assets of $2.18 trillion increased 13% year over year.

However, total revenue growth has become challenging at Wells Fargo. Revenues witnessed a negative compound annual growth rate of 1.2% over the last four years (2019-2023). Although the metric saw an uptick in the first quarter of 2024, the same will be affected in the upcoming period due to rising funding costs.

Business divestitures have also resulted in lost revenues. Notably, Wells Fargo divested around $2 billion of private equity investments in certain funds to a group of leading investors in September 2023. Also, volatility in fee income continues to affect the top-line performance. In 2024, management expects net interest income (NII) to decline 7-9% from $52.4 billion in 2023.

Over the past six months, WFC shares have jumped 45.6% compared with the industry’s 32.8% growth.

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Currently, WFC sports a Zacks Rank #1 (Strong Buy).

Other Stocks to Consider

Some other top-ranked stocks from the finance space are Northern Trust Corporation NTRS and UMB Financial Corporation UMBF, each sporting a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

NTRS’s 2024 earnings estimates have increased 7.4% in the past month. Shares of Northern Trust have gained 16.3% over the past six months.

UMBF’s 2024 earnings estimates have increased 14.4% over the past 30 days. Shares of UMB Financial have jumped 16.1% in the past six months.

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