Financial services giant Fidelity Digital Assets predicts that several countries will start accumulating Bitcoin this year, leading to a wider adoption of the world’s oldest cryptocurrency.
According to a report released on Monday, a number of nations could establish strategic Bitcoin reserves by 2025 as a hedge against “debilitating inflation, currency debasement, and increasingly crushing financial deficits.”
This shift is attributed to the growing interest among institutional investors and global leaders, who are becoming more receptive to cryptocurrencies, particularly following the United States’ plans to embrace Bitcoin.
Fidelity Digital Assets analyst Matt Hogan stated in the report, “We anticipate more nation-states, central banks, sovereign wealth funds, and government treasuries will look to establish strategic positions in Bitcoin.”
Countries that are interested in cryptocurrencies may model their plans based on the policies of pro-Bitcoin nations like Bhutan and El Salvador, which have already achieved significant returns. El Salvador currently holds Bitcoin holdings valued at over $570 million, while Bhutan holds more than $1.1 billion, according to on-chain analytics platform Arkham Intelligence’s data.
The United States currently has the largest Bitcoin stockpile among all nations, valued at approximately $19.3 billion. It is followed by China, the UK, and Ukraine, which hold $19.2 billion, $6.2 billion, and $4.7 billion of the cryptocurrency, respectively.
However, the size of these holdings does not necessarily guarantee significant returns. Certain countries, such as the United States, have specific regulations regarding the handling or auctioning off of Bitcoin, which limits their ability to include these assets as part of their treasuries.
Nonetheless, there are numerous incentives for countries to start accumulating Bitcoin, particularly as the asset’s price continues to hover around its all-time high of $108,000, according to the report.
“We may be entering the dawn of a new era for digital assets, one poised to span multiple years—if not decades,” Hogan stated in the report.
Edited by Sebastian Sinclair.