Bitcoin soared through much of 2021, helped on by the likes of Tesla
The bitcoin price, hitting an all-time high of almost $70,000 per bitcoin in November, has since crashed back, losing around 40% of its value and wiping $1 trillion from the combined crypto market.
Now, Wall Street giant Fidelity has said other countries and even a central bank could follow El Salvador and Tesla into bitcoin this year—predicting those that buy bitcoin while the price is low “will be better off competitively than their peers.”
Sign up now for the free CryptoCodex —A daily newsletter for the crypto-curious. Helping you understand the world of bitcoin and crypto, every weekday
“There is very high stakes game theory at play here, whereby if bitcoin adoption increases, the countries that secure some bitcoin today will be better off competitively than their peers,” Fidelity analysts Chris Kuiper and Jack Neureuter wrote in a note , adding they “wouldn’t be surprised to see other sovereign nation states acquire bitcoin in 2022 and perhaps even see a central bank make an acquisition.”
“I agree with Fidelity, of course, but still astonishing to read this on bitcoin adoption game theory in such a mainstream financial report,” bitcoin advocate Alex Gladstein, chief strategy officer at the Human Rights Foundation, said via Twitter .
In September, El Salvador made bitcoin its official currency alongside the U.S. dollar and began buying bitcoin. This year, the country has said it will buy another $500 million worth of bitcoin, funded by the issuance of $1 billion worth of tokenized bonds, and plans to create an ultra low tax “Bitcoin City.”
Politicians in other countries are watching El Salvador’s bitcoin experiment for signs of success and some have said they’d consider a similar move if it pays off.
This week, the mayor of Rio de Janeiro reportedly said he plans to allocate 1% of the city’s treasury reserves to cryptocurrencies while in the U.S. the mayor of Miami, Francis Suarez, last year said he wants to put some of the city’s treasury into bitcoin.
Meanwhile, Elon Musk’s Tesla followed business software company MicroStrategy
CryptoCodex —A free, daily newsletter for the crypto-curious
“Even if other countries do not believe in the investment thesis or adoption of bitcoin, they will be forced to acquire some as a form of insurance,” the Fidelity analysts wrote. “In other words, a small cost can be paid today as a hedge compared to a potentially much larger cost years in the future.”
The bitcoin price has surged almost 400% since this time two years ago, with the combined crypto market soaring from around $200 billion to $2 trillion. However, the bitcoin price remains highly volatile, twice last year crashing 40% from its peaks even as Wall Street analysts are forecasting increased bitcoin and crypto adoption.
Bitcoin and cryptocurrencies are set for greater acceptance from mainstream investors and companies this year, JPMorgan
Bitcoin is “particularly well-designed as a modern store of value, and the strong design has contributed to the increased confidence in and value of bitcoin,” Worthington wrote, predicting 2022 will be “the year of the blockchain bridge (driving greater interoperability of various chains) or the year of financial tokenization.”
- The Guardian view on central bankers: growing power and limited success
- Stock prices & r*
- Is Al Gore's ethical investment company all it's cracked up to be?
- Memo to the Modern Marketer: Why Bitcoin Could Redefine Earned Media -
- How the Amazon-Google-Uber effect dictates low inflation
- Microsoft funded an Israeli firm that surveils West Bank Palestinians, says NBC News investigation
- New CEO at Wells Fargo will need to decide what kind of bank it should be
- At US$157, Is M&T Bank Corporation (NYSE:MTB) Worth Looking At Closely?
- Weak Pay Growth Puzzles Fed Chief, Just Like Everyone Else
- Markets too big to fail? Ten years after the Great Recession, central bankers may have planted the seeds for the next crisis
- Apple Card won't let you gamble: Users can't buy lottery tickets, casino chips
- Philosophers On Drug Prices
- Tips and Tricks on Buying Second-Hand Cars
- Just wait – Trump's trade war will soon have fallout
- Buying and renting: Your biggest financial decision - in 10 charts
- Will Donald Trump unleash hell on Iran? Oil prices soaring, threats of 'full-on war' from the Ayatollahs, and the US saying it's 'locked and loaded' - are we on the brink of war in the Gulf?
- New finance scheme to buy historic cars
- Tragic lorry migrant, 26, 'was deported from UK just DAYS before dying in trailer', say Vietnamese family who remortgaged home to fund £30,000 return trip
- The $1,000 Note 9 proves your next iPhone or Android prices will get higher
- The $1,000 Note 9 proves that iPhone and Android prices will get higher
‘Astonishing’—An Investment Giant Just Advised Countries And Central Banks To Buy Bitcoin While The Price Is Low have 897 words, post on www.forbes.com at January 15, 2022. This is cached page on Business News. If you want remove this page, please contact us.