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Bitcoin-based stablecoin competing with modern alternatives

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TL;DR

  • CoinShares expects a competitive Bitcoin-based stablecoin in 2024.
  • NFTs gain popularity as unique digital assets.
  • NFTs have the potential to change industries in the cryptocurrency market.

Cryptocurrency investment firm CoinShares predicts that 2024 will be a pivotal year for Bitcoin in the stablecoin arena. According to their analysts, a Bitcoin-based stablecoin project could emerge this year, rivaling the industry’s speed and cost of other stablecoins.

In a recent outlook report published on January 22, CoinShares analysts have expressed their belief that 2024 holds significant promise for the emergence of a Bitcoin-based stablecoin project. 

The report, authored by CoinShares’ head of Bitcoin research, Christopher Bendiksen, and analyst Matthew Kimmel, suggests that a Bitcoin-focused stablecoin could potentially compete with modern stablecoins regarding speed and cost.

A Bitcoin-based stablecoin on the horizon

CoinShares anticipates that a Bitcoin-based stablecoin project, designed to rival existing alternatives, will become easily accessible to users in 2024. 

While Bitcoin-based stablecoins have been introduced before, this new project is expected to address some of the technical challenges faced by previous attempts, making it more user-friendly and competitive.

One key argument in favor of Bitcoin serving as the foundation for a stablecoin is the robustness of its infrastructure. According to Bendiksen and Kimmel, the Bitcoin blockchain offers several advantages, including the longest history, greatest stability, minimal technical debt, and strong assurances. 

These attributes make it a reliable platform for developing stablecoins, potentially providing a secure foundation for the digital currency.

The potential impact on Bitcoin

Introducing a successful Bitcoin-based stablecoin could have far-reaching consequences for the broader cryptocurrency ecosystem. Businesses and Bitcoin plugins are expected to integrate stablecoin spending gradually, fostering continued usage growth. 

This, in turn, could enhance Bitcoin’s monetary properties and its ability to resist censorship, further solidifying its position in the digital currency landscape.

Despite the potential benefits of a Bitcoin-based stablecoin, technical challenges still exist. Bitcoin’s architecture is not natively designed to support external assets like dollar-pegged tokens. 

Additionally, history has shown that stablecoin users tend to gravitate toward platforms offering the lowest transaction costs and the highest speed.

Disclaimer: The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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James Kinoti

A crypto enthusiast, James finds pleasure in sharing knowledge on fintech, cryptocurrency as well as blockchain and frontier technologies. The latest innovations in the crypto industry, crypto gaming, AI, blockchain technology, and other technologies are his preoccupation. His mission: be on track with transformative applications in various industries.

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