According to a new report by Fidelity, even if a government disagrees with bitcoin’s foundations, it will be obliged to purchase some as a sort of insurance.

While organizational acceptance of bitcoin was assumed at its peak in 2020 and 2021, Fidelity Digital Assets predicts that sovereign utilization of bitcoin will spike in 2022.

The paper juxtaposed China’s crackdown on bitcoin in 2021 with El Salvador’s “opposite strategy” of embracing bitcoin as valid cash in the country.

“We think the two developments observed this year couldn’t be more opposed. Time will certainly tell which path is more successful,” Fidelity wrote.

Although several nations are enacting tight crypto regulations, Fidelity does not believe that outright bans are on the horizon.

“An outright ban will be difficult to achieve at best, and if successful, will lead to a significant loss of wealth and opportunity,” reads the report.

However, as more nations accept bitcoin, others will be obliged to do the same, regardless of lack of belief in bitcoin’s investment philosophy or adoption.

“We also think there is very high stakes game theory at play here, whereby if bitcoin adoption increases, the countries that secure some bitcoin today will be better off competitively than their peers,” said the report. “In other words, a small cost can be paid today as a hedge compared to a potentially much larger cost year in the future.”

A Fidelity Digital Assets Institutional Investor Survey indicated that 71 percent of institutional investors in the United States and Europe plan to invest in digital assets in the future.

According to CoinGecko, the price of bitcoin has dropped around 10% since the beginning of 2022 and is currently trading at $42,853.

Leave a Reply

Your email address will not be published. Required fields are marked *

oZone News Instagram

AllEscort