In a recent report published on Tuesday, Fidelity Digital Assets analyst Matt Hogan warned that countries might face greater risks by avoiding Bitcoin than by embracing it. He pointed out that many governments have inadvertently acquired Bitcoin through seizures related to criminal activities, rather than making proactive, long-term investments.
Hogan emphasized that while some nations, like the United States, are restricted by regulatory frameworks that require them to auction off seized Bitcoin, this prevents them from adding the cryptocurrency to their official reserves. Consequently, countries are missing out on Bitcoin’s potential as a strategic asset.
However, Hogan forecasts a major shift in 2025, predicting that more nations, central banks, sovereign wealth funds, and government treasuries will look to establish Bitcoin positions as the asset gains increasing acceptance and adoption globally.
Fidelity noted that countries like Bhutan and El Salvador, who have actively invested in Bitcoin, are likely to influence other nations’ strategies, given the significant returns these countries have experienced in a short amount of time. The US, China, UK, Ukraine, Bhutan, and El Salvador are among the top holders of Bitcoin in government reserves. The US currently owns around 198,109 BTC, valued at approximately $20.171 billion, most of which has been seized during criminal investigations such as the Silk Road case.
Fidelity also pointed out that the US is considering the possibility of creating a strategic Bitcoin reserve. Although President-elect Donald Trump and Senator Cynthia Lummis have expressed support for this initiative, it remains uncertain whether this will come to fruition by 2025. On July 31, 2024, Lummis introduced the Bitcoin Act of 2024, which proposes that the Treasury Department purchase up to 1 million Bitcoin over a five-year period, constituting about 5% of the total supply. The bill would also mandate that these holdings be preserved for at least 20 years, aiming to protect against inflation and potentially bolster the US dollar’s stability.
“If the bill is enacted, we believe the political and financial game theory at play will force other nations to follow suit,” Hogan said. He further speculated that countries looking to accumulate Bitcoin would likely do so covertly, as making such plans public could push prices higher and compromise their strategic position.
January 2025, Cryptoniteuae
