According to a recent report by Fidelity Digital Assets, the burgeoning acceptance of Bitcoin (BTC) by national governments and state treasuries is expected to significantly boost the cryptocurrency’s growth by 2025.
This year could prove pivotal for the widespread adoption of Bitcoin.
Recent Developments in Bitcoin Adoption
The past year, 2024, saw remarkable strides in Bitcoin’s acceptance.
Highlighted events included the Securities and Exchange Commission’s early approval of the first U.S. spot Bitcoin exchange-traded funds (ETFs) and ongoing discussions about establishing a strategic Bitcoin reserve following Donald Trump’s presidential victory.
In their report, “2025 Look Ahead,” Fidelity posits that with both retail and institutional investors now engaging with Bitcoin through ETFs, the momentum of adoption is poised to shift toward government entities.
The research forecasts that by 2025, numerous nation-states, central banks, sovereign wealth funds, and government treasuries will start to actively integrate Bitcoin into their strategies.
The report points to Bhutan and El Salvador as examples, both of which have reaped substantial returns from their investments in Bitcoin within a short period.
Government Strategies and Risks
Matt Hogan, a research analyst at Fidelity, pointed out that for nations, the risk of not investing in Bitcoin could outweigh the inherent risks associated with investing.
He noted that issues like rampant inflation, currency devaluation, and growing fiscal deficits may cultivate an environment where neglecting Bitcoin becomes a critical miscalculation for governments worldwide.
The report also highlighted the Bitcoin Act of 2024, proposed by U.S. Senator Cynthia Lummis.
This legislation aims to establish a national strategic Bitcoin reserve, though its future under a Trump administration remains uncertain.
Global Interest in Bitcoin Reserves
Should this legislation come to fruition, it may trigger a significant shift in political and economic strategies, compelling other nations to pursue similar paths.
Notably, the acquisition of Bitcoin by governments is expected to be conducted discreetly.
This approach is intended to limit market disruption and curb any sudden price surges.
While El Salvador and Bhutan have already set up national Bitcoin reserves, other countries are now contemplating similar moves.
For instance, in December 2024, a federal deputy in Brazil introduced a bill to diversify the National Treasury’s assets to include Bitcoin.
Other nations, including Chile, Canada, and the Czech Republic, are also believed to be exploring the possibilities of creating their own strategic Bitcoin reserves.
At the time of writing, Bitcoin was trading at $94,190, experiencing a decline of 3.4% over the past day.
Source: Bitcoinist
