Governments Will Be ‘Significant’ Bitcoin Investors in 2025

This year will likely see more governments and central banks purchase bitcoin.

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That’s according to a new report on the digital asset space by Fidelity published Tuesday (Jan. 7), which argues that the world’s nation-states will be among the next “significant investors” in the most popular cryptocurrency.

The report notes while many countries hold bitcoin, it has been through government seizures and recoveries from criminal cases. And governments such as the U.S. have requirements for the selling or handling of this bitcoin and can’t list them as part of their treasury.

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“We expect 2025 to be the year this changes for both acceptance and adoption,” writes Fidelity’s Matt Hogan. “This is to say, we anticipate more nation-states, central banks, sovereign wealth funds, and government treasuries will look to establish strategic positions in bitcoin.”

With threats such as inflation, fiscal deficits and currency devaluation, not making bitcoin investments “could become more of a risk to nations than making one,” he added.

The report also notes that figures such as President-elect Donald Trump and Sen. Cynthia Lummis (R-WY) have spoken out in favor of creating a U.S. strategic bitcoin reserve, it’s not yet clear if they’ll follow through with this idea this year.

Assuming this strategy was adopted, the report adds, it is likely countries would begin amassing their bitcoin in secret.

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“This is because no nation has an incentive to announce these plans, as doing so could influence more buyers and drive up the price,” Hogan wrote. “While it remains to be seen if this strategy will be implemented in 2025, those who would potentially adopt it will be incentivized to do so covertly.”

Meanwhile, PYMNTS spoke Tuesday with Mike Katz, a partner in Manatt, Phelps and Phillips Financial Services Group, about what he described as a growing consensus in Congress on the need for “thoughtful, innovation-focused” cryptocurrency legislation.

“It will be interesting to see if any digital asset bills are part of the tax-and-border-focused reconciliation package already being discussed in Congress,” said Katz. “I’d expect a strong stablecoin bill to move quickly given existing bipartisan support.”

He added that the early part of the year could bring a revamped/whittled down version of the pro-crypto bill passed by the House in May of 2024.

“Regardless of form or timing, new legislation will finally provide clarity on the questions of whether crypto assets are ‘securities’ or ‘commodities’ … and on which regulatory authority is charged with oversight,” Katz told PYMNTS.