Fidelity expects the acquisition of Bitcoin by more Sovereign nations in 2022

• The year 2021 proved to be a benchmark as cryptocurrency landed into the mainstream.
• China might go into loss of wealth and opportunity after its ban on the entire cryptocurrency ecosystem.
• Fidelity believes that it’s better to acquire Bitcoin today than tomorrow.

Recently a report came out, according to which, Fidelity said that this year there are more chances of Sovereign nation-states to acquire Bitcoin.

Asset manager’s 2021 conveyed that the previous year is considered to be a year of contrasting developments if we talk about the adoption of cryptocurrency. Although it’s a bit early to tell what was more crucial than the other. According to the corporation, the high-stakes game theory at play will lead the way for more countries to follow El Salvador. Hence, adopt cryptocurrency.

Is Bitcoin a good option?

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The year 2021 witnessed changes that were quite significant and shook the world of cryptocurrencies. The rise in NFTs, GameFi, and institutional adoption helped a lot in bringing Cryptocurrencies into the mainstream. This directly resulted in pushing the industry’s market cap to its all-time high.

Apart from the price action, the largest influence was seen in the government and the regulatory recognition. Fidelity investments said that their Digital Asset Roundup 2021, that the regulatory developments this year witnessed could not have been more divergent.

China issued several bans all through the year 2021. It clamped down on Bitcoin mining in May and successfully banned all transactions relating to cryptocurrencies in the month of September. It completely swept away the whole mining ecosystem when in November the Chinese crackdown on mining took place. 

On the other hand, in September, El Salvador became the first Sovereign nation to accept Bitcoin as a legal tender. And in an order to promote Bitcoin, the government also bought Bitcoin for its reserves. Further, it is also planning to issue a $1 Bitcoin bond, half of it will be used to expand the cryptocurrency reserve.

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Fidelity also has a belief that China’s efforts to ban all crypto-related stuff are going to lead to a considerable loss of opportunity and wealth. Though it is skeptical whether the country can wholly ban it given the nature of digital assets to be decentralized and anonymous.

According to the company, if the adoption increases, the countries that secure Bitcoins today will be well-off in comparison to their peers. Hence the countries which oppose the idea of Bitcoin and its adoption will be compelled to acquire Bitcoin as a form of insurance.

The asset manager has confidence in the fact that acquiring Bitcoin today at a low price is much better than acquiring it later with a potentially much higher cost.

Fidelity concluded in its report that they wouldn’t be amazed if, in the year 2022, other sovereign nation-states acquire Bitcoin, and perhaps they can even see a central bank acquiring it.

It’s quite true that the year 2021 was a benchmark for the cryptocurrency industry. The decisions of China and El Salvador were poles apart. It’s quite captivating to look forward to what might happen this year and whether the expectations of Fidelity turn out to be true.