Fidelity Digital Assets published their yearly crypto report which covered regulatory and institutional developments, bitcoin mining and general industry expansion.
The researchers said that 2021 was a year that further confirmed digital assets have arrived and are here to stay.
On January 6th, Fidelity Digital Assets (FDAS) released a “Research Round-Up” report analysing “the most important stories of 2021 and what they could mean for the future of digital assets.” The write-up was co-authored by Jack Neureuter and Chris Kuiper.
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According to the authors, awareness and adoption of crypto assets grew in 2021, with
additional institutional allocations, increased product access in the form of private placements and futures ETFs, and a meaningful growth in overall awareness and intent to allocate in the future shown across many surveys of institutional investors.
The company’s research from last year found that “71% of U.S. and European institutional investors surveyed intend to allocate to digital assets in the future.” FDAS suspects that clarity in regulation and increased accessibility will be key factors in continuing institutionalization through 2022.
In the report, the authors compare the diametrically opposed actions of the Chinese and El Salvadorian government, the former of which has taken a hard stance against bitcoin, while the latter adopted the crypto as legal tender last summer.
The Fidelity authors go on to exalt the El Salvadorian government indirectly, noting that “history has shown capital flows to where it is treated best and embracing innovation leads to more wealth and prosperity. The authors added that 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.” Such an outcome would be in line with El Salvadorian president Nayib Bukele’s expectations for the year ahead.
All in all, the FDAS report summarised 2021 as a “year of resilience and bullishness” for bitcoin mining, noting the “truly astounding” rebound in hashrate following the Chinese mining ban last summer. As reported on Monday, bitcoin’s mining activity reached all time highs averaging at 196 EH/s, rendering the Chinese ban on the asset fruitless. The litecoin network followed the same trend, recovering dramatically alongside bitcoin.
The authors described the recovery as a stress test on the network. If a government-led mining shutdown were to occur, bitcoin now has a benchmark upon which to base expectations. Per the report, “this has now been tested and bitcoin’s network performed perfectly.”
They added:
“publicly traded mining companies have been showing signs of bullishness by not only holding more bitcoin on their balance sheets, but buying more and for some, issuing debt to make additional purchases and capital expenditures.”
FDAS is a member of Fidelity Investments, one of the world’s biggest financial services providers. Fidelity has over $7 trillion in assets under management and processes 1.3 million trades every day.
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