• Bitcoin’s primary appeal lies in its store-of-value role, not daily payments, as emphasized by major asset managers.

• Stablecoins have achieved strong product-market fit for moving value efficiently across borders and in trading.

• Scaling solutions like Lightning Network are essential but face challenges, with research indicating potential long-term sustainability issues for some layer-2 networks.

Discover BlackRock’s view on Bitcoin daily payments: a speculative upside beyond its digital gold status. Explore stablecoins’ rise and expert insights on crypto’s payment future. Stay informed on key developments.

What is the future of Bitcoin daily payments according to experts?

BlackRock’s head of digital assets, Robbie Mitchnick, views the potential for Bitcoin daily payments as an “out-of-the-money option value upside,” meaning it’s a low-probability, high-reward scenario rather than the main reason for investing in the asset. Most institutional clients focus on Bitcoin’s role as digital gold, a reliable store of value amid economic uncertainties. While not ruling out broader payment adoption, Mitchnick stresses that it remains speculative without major technological hurdles being overcome.

Why do stablecoins outperform Bitcoin in payment applications?

Stablecoins have demonstrated remarkable success in the payments sector due to their stability and efficiency in transferring value, particularly in crypto trading, decentralized finance (DeFi), and cross-border transactions. Robbie Mitchnick highlights their “massive product market fit” as instruments for quick, low-cost value movement, outpacing Bitcoin in these areas. For instance, they are increasingly used for retail remittances, corporate payments, and even capital market settlements, expanding beyond traditional crypto ecosystems.

Mitchnick notes that Bitcoin could compete in retail remittances but requires substantial improvements in scalability. He points to the need for advancements in Bitcoin’s core protocol, the Lightning Network, and other layer-2 solutions to enable fast, affordable daily transactions. Galaxy Research, in a report from August 2024, analyzed various Bitcoin layer-2 networks and concluded that while rollups offer promising scalability for cheap and decentralized payments, many may not prove sustainable over the long term due to economic and technical constraints.

Robbie Mitchnick spoke to Natalie Brunell on the Coin Stories podcast. Source: Natalie Brunell

This assessment underscores the challenges ahead: achieving widespread Bitcoin daily payments demands innovations that maintain decentralization without compromising security or speed. In contrast, stablecoins benefit from pegging to fiat currencies, providing the predictability essential for everyday use. Mitchnick envisions stablecoins extending into multinational corporate transactions and institutional settlements, further solidifying their position.

Expert opinions align on stablecoins’ rapid growth. ARK Invest CEO Cathie Wood recently adjusted her 2030 Bitcoin price forecast from $1.5 million downward by about $300,000, attributing this to stablecoins “scaling faster” than anticipated. Wood explained that stablecoins are now fulfilling many payment roles she originally expected Bitcoin to dominate, particularly in emerging markets where efficient payment rails are crucial.

“Stablecoins are usurping part of the role that we thought that Bitcoin would play,” Wood stated in a recent interview. She emphasized the growing institutional focus on new payment infrastructures in the United States and beyond. This shift highlights how stablecoins address real-world needs for stable, borderless transfers, areas where Bitcoin’s volatility has been a barrier.

Tether co-founder Reeve Collins echoed this optimism, predicting in a September interview that “all currency” could transition to stablecoins by 2030. He foresees a broader on-chain transformation of finance, where stablecoins become the standard for everyday and institutional value exchange. Collins’ perspective draws from Tether’s dominance in the stablecoin market, which has processed billions in transaction volume, demonstrating proven reliability.

These insights from industry leaders illustrate the evolving landscape of digital assets. While Bitcoin’s foundational role as a store of value remains unchallenged, the payment domain is increasingly led by stablecoins. Mitchnick cautions that for Bitcoin to pivot toward daily payments, “a lot needs to happen” in terms of infrastructure development. This includes regulatory clarity, broader merchant adoption, and seamless integration with existing financial systems.

From a historical viewpoint, Bitcoin was envisioned by its creator, Satoshi Nakamoto, as peer-to-peer electronic cash. However, its price appreciation and network congestion have shifted perceptions toward it being more akin to gold than cash. Data from blockchain analytics firms shows Bitcoin’s transaction volume heavily skewed toward large-value transfers rather than micro-payments, reinforcing the store-of-value narrative.

Stablecoins, on the other hand, have seen explosive growth. According to reports from firms like Chainalysis, stablecoin transfer volumes exceeded $10 trillion in 2024 alone, rivaling traditional payment networks like Visa in certain metrics. This traction is driven by their use in remittances—vital for emerging economies—where they offer lower fees and faster settlement times compared to legacy systems.

Institutional adoption further bolsters stablecoins’ case. Major banks and fintechs are piloting stablecoin-based solutions for cross-border payments, citing benefits like 24/7 availability and reduced intermediary costs. Mitchnick’s comments reflect BlackRock’s client base, where portfolio managers prioritize Bitcoin’s scarcity and inflation-hedging properties over transactional utility.

Frequently Asked Questions

Will Bitcoin ever achieve widespread use for daily payments like coffee purchases?

Bitcoin’s potential for daily payments, such as buying coffee, hinges on scaling solutions like the Lightning Network to enable fast, low-fee transactions. Experts like Robbie Mitchnick from BlackRock see this as speculative, requiring protocol upgrades and merchant adoption. Currently, volatility and infrastructure limits make it more suitable for larger transfers, but progress in layer-2 tech could change that in the coming years.

How are stablecoins changing the role of Bitcoin in global payments?

Stablecoins are transforming global payments by offering stable value transfer options for trading, remittances, and settlements, areas where Bitcoin’s volatility limits its use. As Cathie Wood from ARK Invest notes, their faster scaling is impacting Bitcoin’s projected dominance in these functions. This evolution allows crypto to integrate more deeply into everyday finance, complementing Bitcoin’s store-of-value strengths.

Key Takeaways

• Bitcoin’s core value proposition: Remains as digital gold for long-term holding, with daily payments viewed as a bonus rather than essential by institutional investors.
• Stablecoins’ dominance in payments: Their efficiency in cross-border and retail transactions positions them as leaders, supported by trillions in annual volume and expert endorsements.
• Path forward for Bitcoin payments: Focus on scalability innovations like Lightning to unlock potential, while monitoring regulatory and adoption trends for broader utility.

Conclusion

In summary, Bitcoin daily payments represent an intriguing but speculative frontier, overshadowed by its established role as digital gold, as articulated by BlackRock’s Robbie Mitchnick. Stablecoins continue to lead in practical payment applications, from remittances to institutional settlements, with projections from experts like Cathie Wood and Reeve Collins pointing to their explosive growth. As the crypto ecosystem matures, advancements in Bitcoin’s infrastructure could bridge these gaps, fostering a more versatile digital asset landscape—investors should watch for scaling breakthroughs and policy shifts to capitalize on emerging opportunities.