Fidelity Digital Assets released their 2021 digital asset research report covering institutionalization, regulatory developments, bitcoin mining, and general expansion. Their conclusion: “2021 was a year that further confirmed digital assets have arrived and are here to stay.”
On January 6th, Fidelity Digital Assets (FDAS) issued a “Research Round-Up” report looking at “the most important stories of 2021 and what they could mean for the future of digital assets.” The report was co-authored by Chris Kuiper and Jack Neureuter.
Per the report, awareness and adoption of digital 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 firm’s own research conducted last year showed “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.
The report contrasts actions of the Chinese and El Salvadorian governments, the former of which has taken a hard line against Bitcoin while the latter adopted bitcoin as legal tender last summer. The FDAS report states that “history has shown capital flows to where it is treated best and embracing innovation leads to more wealth and prosperity” and 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.”
The report characterized 2021 as a “year of resilience and and bullishness” for bitcoin mining, noting the “truly astounding” rebound in hashrate following the Chinese mining ban last summer. They described this recovery as a test of whether the Bitcoin network could withstand a large, government-led mining shutdown. According to FDAS, “this has now been tested and bitcoin's network performed perfectly.” They added that “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 largest financial services providers, with more than $7 trillion in assets under management and over 1.3 million trades processed every day.