Investing.com – Cryptocurrencies have for some time been mainstream options and assets considered by institutional investors. The year 2021 has seen the launch of many projects aimed at enabling the use of cryptos by large investors looking to benefit from the growth of the sector.
During the same period, governments, central banks and regulators have made headlines attempting to either ban or regulate digital currencies or even experiment with the implementation of CBDCs.
Increased adoption in 2022
In this sense, Fidelity predicts in its Digital Assets report that the year 2022 could be the era of the adoption of by sovereign states.
The report contrasts China’s crackdown on bitcoin throughout 2021 and El Salvador taking “the opposite approach” by adopting the digital asset as legal tender in the country.
Fidelity, however, remains cautious about the best way forward. “We believe that the two developments seen this year could not be more opposite. Time will certainly tell which path will be more fruitful.”
A trend towards a more favorable environment
Even though many countries around the world take a strict approach to crypto regulation, Fidelity does not believe that outright bans are on the table. “An outright ban will be, at best, difficult to achieve, and if successful, will result in a significant loss of wealth and opportunity.”
Instead, as more countries adopt bitcoin, other countries will be forced to follow suit, even if they don’t believe in the investment thesis or bitcoin adoption. .
Thus, competition and opportunity cost could be a game-changer. “We also think there’s a very high-stakes game theory at play here that if bitcoin adoption increases, countries that secure some bitcoin today will be better off competitively than their peers”.
A growing advantage and interest in cryptocurrencies
Fidelity believes that bitcoin could bring a significant benefit to countries that adopt it quickly. “In other words, a small cost can be paid today as a hedge against a potentially much larger cost a year later.”
Added to this is the trend among institutional investors, which turned out to be 71% intending to allocate digital assets in the future according to the Fidelity survey.
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