According to CryptoPotato, analysts at European alternative asset management firm CoinShares predict that the emergence of Bitcoin-based stablecoins could make 2024 a pivotal year for the leading digital network. In its Outlook 2024 report, the firm explained that the effects of a stablecoin settlement on Bitcoin would be numerous, including the enhancement of BTC’s monetary properties and the acceleration of its global adoption.
With Bitcoin in its second decade of existence, conversations about the network have moved from the awareness into the merit phase. People no longer wonder what cryptocurrencies are but how such assets solve real problems. The success of stablecoins can be seen in their growth within four years: a 1,100% increase to a market cap of over $123 billion and transfer volumes totaling $5 trillion in the past year. Despite the success of these assets, they are facing significant challenges, such as being created on centralized or unstable blockchains, making users vulnerable to systemic failures like the Terra ecosystem collapse.
These issues have presented the need for developers to launch stablecoins on Bitcoin, as the network has the longest history, greatest stability, least technical debt, and strongest assurances. Although there is a need for stablecoins on the Bitcoin blockchain, the path to such a feat is technically challenging, as BTC was designed without the flexibility to support external assets like dollar-pegged tokens natively. Regardless, CoinShares’ analysts believe 2024 will be pivotal for Bitcoin in the stablecoin arena as viable development projects are predicted to emerge as accessible tools. These projects would “rival” the speed and cost of other stablecoins while inheriting the fundamental stability of Bitcoin infrastructure. This year, Bitcoin projects focused on competing in the stablecoin sector will likely be made accessible to users, while plugins will integrate stablecoin spending, paving the way for continued usage growth.
