Remarkable news from an investment firm that expects governments of several countries to start buying Bitcoin. Read here why.
Fidelity Investments released a report last week on crypto trends and their potential future impact. One trend discussed in the report is the adoption of cryptocurrency by sovereign nations. This is remarkable, because many governments want more rules and see digital currencies as a threat to their own currencies.
Governments are going to buy Bitcoin
The company describes in the report that it expects more sovereign nation states, or even a central bank, to buy Bitcoin this year. “There is a very high stakes game theory here where Bitcoin adoption is increasing. The countries that secure some Bitcoin today will be more competitive than their peers,” the company explained. This while the coin has lost significant value in recent times.
“Over the past year, some important steps have been taken by world governments regarding digital assets,” Fidelity described. Some countries have already done this, such as El Salvador. That didn’t quite go according to the book, but it does set a trend.
Ban impossible
Some politicians want a general ban on cryptos. That’s just about impossible. A total ban will be difficult to achieve at best. And if it succeeds, it will lead to a significant loss of wealth and opportunity. Therefore, even if other countries do not believe in the investment thesis or the adoption of Bitcoin, they will be forced to buy one as a form of insurance. In other words, a small cost can be paid today as a hedge compared to potentially much larger cost years in the future. But it still remains a kind of speculation and whether Western countries have the guts for that remains a question mark.
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