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- BlackRock says investors see Bitcoin mainly as digital gold, not a payments network.
- Stablecoins outpace Bitcoin as they scale faster and dominate real-world transactions.
- Industry forecasts shift as stablecoins take roles once expected to belong to Bitcoin.
BlackRock said most major asset-management clients still view Bitcoin as a store of value rather than a future payments network. Robbie Mitchnick, the firm’s head of digital assets, said investors do not “underwrite” Bitcoin as a global payment system. He described that idea as distant and speculative. He added that clients treat it as a possible upside, not a central investment case.
Mitchnick emphasized that investors pay attention to the profile of Bitcoin as digital gold. He claimed that its payment potential is shaped by significant advancements in scaling. Bitcoin has to upgrade by Lightning and other improvements before it can cope with transactions of everyday usage. He claimed that these changes are not assured. He has also identified research that challenged the stability of the existing scaling solutions.
BlackRock Cites Scaling Risks as Bitcoin Layer-2 Stability Faces Doubts
In Aug. 2024, Galaxy Research also warned that there are several Bitcoin layer-2 that might fail to support time. According to the report, there is a problem of sustainability of rollups. It claimed that the model might not remain sustainable with an expansion in usage.
It also added that affordable, rapid, and decentralized Bitcoin payments are still a difficult task to maintain. Mitchnick referred to these results to justify why investors do not consider payments as a short-term event.
He created a comparison between the slow development of Bitcoin and the speed of its stablecoins. Mitchnick declared stablecoins an enormous success in money movements. They transfer value at low cost and fast. They are also the ones that are easy to integrate with the digital platforms. He claimed this provides them with a clear advantage compared to Bitcoin in the payment industry.
Also Read: Crypto Trading Evolves: BlackRock’s BUIDL Fund Enters as Yield-Bearing Collateral
Stablecoins Seen Expanding Into Global Payments and Settlement Markets
Mitchnick asserted that stablecoins have the potential to surpass the boundaries of crypto trading and DeFi. He cited retail remittances, corporate remittances, multinational remittances, and capital market settlement.
According to him, these areas require quicker tracks and consistent rates. The presence of stablecoins already fulfills such requirements. He opined that Bitcoin would counterfeit certain remittance markets and will not be practical in other markets.
This change can be seen in industry sentiment. Cathie Wood, CEO of ARK Invest, just lowered her forecast of Bitcoin in 2030. According to her, stablecoins are scaling faster than she thinks. Wood claimed that they are usurping positions that she thought would be overtaken by Bitcoin. She reduced her previous target of $1.5 million to approximately $300,000.
Wood also opined that emerging markets are fueling demand for new payment infrastructure. She further stated that the institutions of the United States are investigating new rails constructed in case of stablecoins. The trend facilitates the wider use of on-chain payments.
The same line was echoed by Tether co-founder Reeve Collins. According to him, all currency will be stablecoins by 2030 when finance completely goes on-chain.
Also Read: Coinbase Launches Major BTC and ETH Wallet Migration Amid Security Upgrade
