Fidelity recently issued a warning, emphasizing that if a country ignores Bitcoin allocation, it will become more vulnerable when facing multiple pressures such as inflation, fiscal deficits and international competition. Therefore, it becomes extremely important to make strategic digital asset allocations.
Its latest report predicts that by 2025, parties including nation states, central banks, sovereign wealth funds, and government finance ministries are likely to seek and determine their own strategic positioning in the cryptocurrency market.
The prediction comes after the approval and launch of a spot Bitcoin exchange-traded product (ETP) in 2024, which sparked huge interest and demand from both institutional and retail investors.
With the emergence of this new accessibility, the distribution process of Bitcoin has been simplified, allowing pension funds and endowments to participate, reflecting that digital assets are gradually gaining wider institutional recognition.
Historically, countries like the United States and China hold Bitcoin mainly due to government seizures related to illegal activities, rather than intentional strategic investments. However, Fidelity believes this situation is about to change.
The report also specifically mentions the successful cases of Bhutan and El Salvador, which actively promote Bitcoin strategies and have reaped substantial rewards.
In the face of severe challenges such as rising inflation, currency devaluation, and budget deficits, more and more national governments may view Bitcoin as an effective hedge against economic instability, as the potential costs of inaction are likely to far exceed the costs of adopting Bitcoin.
Fidelity further predicts that there will be significant changes in Bitcoin's acceptance and adoption by 2025. Metaplanet CEO Simon Gerovich believes that if elected, President Trump establishes a U.S. Bitcoin reserve, countries like Japan may follow suit.
Trump and Senator Lummis have publicly expressed an open attitude towards establishing Bitcoin reserves. Lummis, a long-time supporter of cryptocurrencies, has also proposed the (2024 Bitcoin Act), aimed at creating a clear regulatory framework for integrating Bitcoin into U.S. fiscal strategy.
Fidelity stated that if such measures are implemented, geopolitical and economic pressures are expected to compel other countries to follow suit, but it may be done secretly to avoid market disruption.
Despite overall optimistic predictions, the report also points out uncertainties in government actions and policy-making. Meanwhile, statements from new U.S. officials suggest an optimistic outlook on digital assets, but competing legislative priorities may delay progress.
In summary, the recognition of Bitcoin and cryptocurrencies as important financial tools is continuously increasing, pushing this industry from the margins to the forefront of economic discourse.
Do you agree with Fidelity's viewpoint? Do you believe Bitcoin can become an 'economic savior' for various countries and influence its future in the global financial landscape? Leave your thoughts in the comments!
