Here’s How 2024 Will Be Crucial for Bitcoin in the Stablecoin Arena: CoinShares

The emergence of a Bitcoin-based stablecoin could make 2024 a pivotal year for the major digital network, according to analysts at European alternative asset management firm CoinShares.

In its Outlook 2024 report, the firm explained that the effects of stablecoin settlement on Bitcoin would be many, including improving BTC's financial assets and accelerating global adoption.

The Importance of Stablecoin Based on Bitcoin

In Bitcoin's second decade, conversations about the network have moved from awareness to expertise. People no longer think about what cryptocurrencies are, but how such assets can solve real problems.

While native assets are still a “controversial topic,” according to CoinShares, users are familiar with the digitized crypto-dollar because it's easy to imagine the benefits of a US dollar token. The success of stablecoins can be seen in their growth in four years: a 1,100% increase to a market value of more than $123 billion and transaction volumes of $5 trillion last year.

Although these properties are successful, they are facing serious problems. One of these is that almost all stablecoins are created on decentralized or unstable blockchains, which leaves users vulnerable to system failures like the Terra ecosystem collapse.

These issues present the need for developers to launch a stablecoin on Bitcoin, as the network has the longest history, greatest stability, least technical debt, and strong guarantees.

A critical year

Despite the need for a stablecoin on the Bitcoin blockchain, the path to such a feat is technically challenging, as BTC is designed without the volatility of external assets such as dollar-peg tokens.

Regardless, CoinShares analysts believe that 2024 will be critical for Bitcoin in the statcoin arena, as viable development projects are expected to emerge as accessible tools. These projects “compete” the speed and value of other stablecoins while inheriting the fundamental stability of Bitcoin's infrastructure.

This year, Bitcoin projects focused on competing in the Statcoin sector will become accessible to users, while plugins will integrate stable coin spending and pave the way for continued usage growth.

We find that a successful integration increases transaction demand and introduces a new set of users to Bitcoin. Secondly, a stablecoin can act as a gateway, introducing Bitcoin to more users; Perhaps they have not yet explored its potential and assets as cash, analysts added.