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.”
“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.