Fidelity Anticipates Increased Adoption of Bitcoin by Nation-States and Central Banks in 2025
According to a recent report by Fidelity, countries are expected to include Bitcoin in their national strategic reserves by 2025, which will lead to significant growth in the crypto market. Fidelity Digital Assets Research team stated in their 2024 Look Ahead that investors should prepare for accelerated adoption, development, interest, and demand for digital assets.
Fidelity Digital Assets research analyst Matt Hogan noted, “We anticipate more nation-states, central banks, sovereign wealth funds, and government treasuries will look to establish strategic positions in Bitcoin.” The report highlighted that these entities are likely to learn from Bhutan and El Salvador’s strategies, as they have gained significant returns in a short period. It also mentioned that with increasing inflation, currency devaluation, and rising fiscal deficits, not allocating to Bitcoin could be riskier than making an allocation.
The report also mentioned that although President-elect Donald Trump and Senator Cynthia Lummis have expressed their intentions to establish a strategic Bitcoin reserve in the United States, it remains to be seen if they will follow through with this plan in 2025. Senator Lummis introduced the “Bitcoin Act of 2024” to the Senate in July, and if passed, it could put political and financial pressure on other countries to adopt similar measures.
If nation-states were to accumulate Bitcoin, they would likely do so discreetly to avoid driving up the price by attracting other investors, the report stated. Currently, the United States, China, the United Kingdom, Ukraine, Bhutan, and El Salvador are the largest government holders of Bitcoin. Many of these countries have acquired Bitcoin through government seizures and the recovery of Bitcoin associated with criminal activities.
The report also predicted that tokenization will be the “killer app” of 2025, with the on-chain value doubling from $14 billion to $30 billion by the end of the year. Hogan emphasized that tokenization has immense potential in financial services and other sectors.
In conclusion, the report stated that investors are not too late to join the digital asset movement, as they could be entering a new era that will span multiple years. This era may see digital assets permeating various sectors, industries, technologies, fields, balance sheets, and even nation-states.
Tags: Bitcoin