While institutional adoption of bitcoin is expected to peak in 2020 and 2021, Fidelity Digital Assets predicts that sovereign use of bitcoin will peak in 2022. The paper contrasted China’s crackdown on bitcoin in 2021 with El Salvador’s “opposite approach” of embracing bitcoin as legal cash in the country.
“We believe the two trends we’ve seen this year couldn’t be more diametrically opposite. “Only time will tell which option proves to be more successful,” Fidelity stated. Despite the fact that several nations are enacting tight crypto regulations, Fidelity does not believe that outright bans are on the horizon.
“An outright prohibition will be difficult at best to achieve, and if it is, it will result in a huge loss of revenue.”Despite the fact that several nations are enacting tight crypto regulations, Fidelity does not believe that outright bans are on the horizon.
According to the research, “an outright prohibition will be difficult to achieve at best, and if achieved, will result in a huge loss of money and opportunity.”Instead, as more countries accept bitcoin, others will be obliged to do so as well, even if they do not believe in bitcoin’s investment thesis or adoption.
“We also believe there is very high stakes game theory at work here,” according to the paper, “where governments that protect some bitcoin today would be better off competitively than their counterparts if bitcoin adoption increases.” “To put it another way, a little fee can be paid today as a hedge against a future cost year that could be significantly higher.”
A Fidelity Digital Assets Institutional Investor Survey indicated that 71 percent of institutional investors in the United States and Europe intend to allocate 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.