Shows how Bitcoin could evolve from primarily being a store of value to gaining a broader role in payments, pricing and global settlements — and outlines a possible future of “financialized Bitcoin” versus a deeper “Bitcoinization” of the financial system.
In order for Bitcoin to move more clearly beyond its role as a store of value and be used more as a means of payment, several conditions must fall into place. First, more businesses and individuals need to put it into practice, allowing people to both earn and use bitcoin in circular economies, rather than mainly toggling in and out of fiat. Lower volatility and deeper liquidity will make it easier to price goods and services and hold short-term balance sheet items in bitcoin without too much risk.
On the technology side, scaling solutions — particularly layer-2 networks — are needed that can handle high transaction volumes at low cost, making everyday payments convenient. At the same time, tax and regulatory frameworks need to be clearer and more manageable, especially in countries where every small bitcoin purchase today triggers a taxable event. Taken together, such changes will make it more natural to use bitcoin directly in transactions, and not just keep it as a long-term investment.
Taking the step further to becoming a unit of account is a far more comprehensive shift. That would involve goods, services and contracts being routinely priced in bitcoin, rather than in national currencies such as dollars or euros. One oft-discussed way there is for key commodities — such as energy or some raw materials — to begin to be quoted and denominated in bitcoin in the long term, which can gradually stabilize their value relative to those commodities.
If significant international trade flows are denominated in bitcoin, producers, suppliers and financial institutions are given strong incentives to adjust their own pricing and accounting accordingly. In such a scenario, states could also choose to hold bitcoin in their currency and reserve regimes to support cross-border settlement and access to global trade. It will mark a shift from Bitcoin as a niche asset to a benchmark in parts of the global monetary system.
As Bitcoin's role evolves, financial institutions will typically follow an incremental adoption path. Early steps often involve indirect exposure, such as through investment products or structured solutions that follow the bitcoin price. Then banks and trustees can build up secure custody services and brokerage functions, allowing clients to buy, hold and transfer bitcoin within regulated frameworks.
More advanced phases may involve lending with bitcoin as collateral, payment services with settlement directly on Bitcoin or associated layer-2 networks, and more complex products built on Bitcoin's infrastructure. Each step increases integration with the traditional financial system, but also raises questions about how much of the original peer-to-peer idea is preserved when most users encounter Bitcoin through large institutions and not via their own self-preservation.
Looking one ahead, two main directions are often discussed. In a financialisation scenario, Bitcoin becomes deeply integrated into today's financial system: it is used as an underlying in a growing array of investment products, derivatives and credit markets, and most customer journeys go via regulated intermediaries. Bitcoin then acts as an important asset within the existing framework, while the very structure of the financial system is largely made up.
In a “bitcoinization” scenario, Bitcoin becomes more central to the very design of financial services and monetary relations. New services and institutions are built directly on Bitcoin or its associated layer of scale, and a greater proportion of economic activity is done in bitcoin rather than referring primarily to fiat currencies. In the Bitcoin environment, there are different views on these directions: some see deeper financialization as a sign of maturation and integration, while others warn that the same kind of leverage and counterparty risk that Bitcoin was intended to reduce could return via financial intermediaries.
It is impossible to predict which of these futures -- if any -- will dominate. Technological developments, regulatory lines, macroeconomic conditions and user preferences will all influence Bitcoin's further course. It may end up as primarily a long-term store of value, become a more widespread means of payment in select segments, or evolve to become an important unit of account in specific markets and contract forms.
Under this uncertainty, a key question for institutions, governments and individual actors becomes how Bitcoin's potential roles should be assessed, and how best to prepare for different possible development trajectories. The tension between cautious skepticism and strong conviction reflects both the open-ended nature of Bitcoin's future and the asymmetrical difference between ignoring versus actively relating to the technology.