Bitcoin's Soaring Fees Limit Peer-to-Peer Use, While Its Future As a Store of Value Remains Uncertain
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Bitcoin was originally intended for peer-to-peer payments, but high transaction fees are making small transfers impractical. This pushes adoption towards custodial solutions rather than self-custody.
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As a settlement layer and store of value, Bitcoin still functions decently. Over $32 billion in value moves daily, though this is below last cycle's peak.
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A spot Bitcoin ETF seems likely to get approved in early 2024. This could drive new investment, though advisor survey respondents expect relatively small inflows.
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Despite positive trends, Bitcoin may be due for a price pullback before the next halving event in April. There are still risks around volatility and loss of value.
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Long-term, Bitcoin can still serve as an inflation hedge. But practical use likely shifts towards custodial solutions rather than peer-to-peer payments for many users.