Fidelity Digital Assets believes the adoption of Bitcoin and other cryptocurrencies is now at a "tipping point" of wide financial market and retail investor demand.
The digital currency service provider for institutional investors said the conducive environment has made cryptocurrencies an attractive investment for most, including those who would not otherwise consider buying into the trend.
Fidelity Digital Assets head, Tom Jessop, said the accelerated adoption of digital currencies has been fueled by "unprecedented monetary and fiscal stimulus." He said during the Investing in Crypto virtual event that the unprecedented pace of adoption was also spurred on by a host of other reasons.
"We're not going to get out of this stimulated environment anytime soon. I think we've reached a tipping point," Jessop said, referring to easy monetary policies by central banks worldwide and government economic stimulus efforts..
Jessop pointed to reasons such as easing monetary policies and near-zero interest rates as some of the main contributing factors. He said the measures are considered to be necessary for the US Federal Reserve as it attempts to stabilize the economy during the prolonged pandemic.
While it may be considered necessary, Jessop said the move is driving investors to Bitcoin and other digital assets as they offer better returns when compared to the yields offered by bonds and other "richly priced" investment vehicles.
Since the start of the year, the price of Bitcoin - the largest digital currency by market cap - has risen by more than 95% as more institutions adopt the trend. Over the past few days, Bitcoin prices have dropped by around 5%, trading at around $57,700 per coin.
Jessop said the pandemic was the catalyst that began the wave of institutional adoption.
Apart from Fidelity, other high-profile organizations have also conceded that Bitcoin may play an important role in the future of the global economy.
Citibank said in a report published last month that it believes Bitcoin will achieve mainstream adoption. The bank said the digital currency could become a facilitator of future global trade. BNY Mellon announced earlier in the year that it will be investing heavily in Bitcoin on behalf of its clients.
Analysts said that Bitcoin will have to face massive hurdles before it can truly become mainstream. The biggest among those challenges is its volatility and its lack of regulation.