Bitcoin cycle is far from over and miners are in it for the long haul: Fidelity report
Fidelity Digital Assets — the crypto wing of Fidelity Investments, which has $4.2 trillion assets under management, shared their “two sats” on the future of the digital assets space. The key takeaways touched upon miners’ behavior and Bitcoin (BTC) network adoption.
In the annual report released last week, the group shared some insights into the world of BTC mining:
“As Bitcoin miners have the most financial incentive tho make the best guess as to the adoption and value of BTC (…) the current bitcoin cycle is far from over and these miners are making investments for the long haul.”
The report stated that the recovery in the hash rate in 2021 “was truly astounding,” particularly when considering that the world’s second-largest economy, China, banned Bitcoin in 2021. The rebound in hash rate since the ban thanks to BTC’s hash power being “more widely distributed around the world,” showed miners are set on long-term profits.
The statements aligned with miners’ recent selling performance. Key on-chain metric indicate Bitcoin miners are in “massive” BTC accumulation mode, as miners show no desire to sell.
Related: Fidelity exec says Bitcoin is ‘technically oversold,’ making $40K a ‘pivotal support’
When it came to orange-pilling entire countries, Fidelity made some interesting predictions into more nation-states accepting BTC as legal tender:
“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. We, therefore, wouldn’t be surprised to see other sovereign nation-states acquire bitcoin in 2022 and perhaps even see a central bank make an acquisition.”
Their comments come as Tonga’s former MP suggested the country could adopt BTC in late 2022.
In essence, more regulation and better products will open up the crypto space, “bringing a greater portion of the hundreds of trillions in traditional assets into the digital asset ecosystem.” Combined with miners’ hodling, it could lengthen the cycle and drive BTC to new highs.