Fidelity Digital Assets has released a report forecasting that Bitcoin (BTC) will become a key asset for nation-states and financial institutions by 2025. The firm predicts that governments, central banks, and sovereign wealth funds will increasingly see Bitcoin as an essential hedge against inflation, currency devaluation, and growing fiscal deficits.
In the report, Fidelity analyst Matt Hogan emphasized the economic risks associated with not holding Bitcoin in today’s climate of rising inflation and fiscal instability. “With inflation continuing to rise and fiscal deficits widening, not having a strategic position in Bitcoin may soon pose a greater risk than owning it,” Hogan stated.
The report also highlights the efforts of U.S. politicians, including President-elect Donald Trump and Senator Cynthia Lummis, who have been advocating for the creation of a national Bitcoin reserve. While it remains to be seen if these proposals will be implemented in 2025, Fidelity suggests that if the U.S. moves forward with the plan, it could set an example that other countries will follow.
One major point of focus is Lummis’ “Bitcoin Act of 2024,” a bill she proposed that could force other nations to consider their own Bitcoin accumulation strategies. If passed, the bill could establish a political and financial “game theory,” pushing other countries to adopt similar policies, Fidelity suggested.
In addition, the report speculates that countries looking to accumulate Bitcoin will likely do so quietly, without announcing their purchases to the public. Such secrecy would avoid price spikes that could result from sudden large-scale buying.
Currently, governments like those of the U.S., China, the U.K., Ukraine, Bhutan, and El Salvador hold significant amounts of Bitcoin, primarily from seizures linked to criminal activities. Fidelity notes that the growing trend of governments accumulating Bitcoin as a reserve asset may soon expand beyond these nations, with more countries entering the space.
