- Bitcoin’s decentralized system allows it to coexist with fiat, remaining resistant to central bank control.
- Bitcoin is treated as both an investment and a high-value transfer system due to rising transaction costs in the U.S.
- Global usage of Bitcoin varies, playing a significant role in payments outside the U.S., where it has become digital gold.
Bitcoin’s role in the financial ecosystem continues to get more traction. Speaking on CNBC, Custodia Bank CEO Caitlin Long provided a fresh perspective on how Bitcoin and the fiat system are positioned to coexist for the foreseeable future. Long highlighted that Bitcoin remains unique due to its decentralized nature, which sets it apart from traditional currencies.
Bitcoin’s Uncontrollable Nature
A key aspect emphasized by Long is that no one controls Bitcoin. Unlike fiat currencies, Bitcoin operates purely through code maintained by engineers. This decentralized, open-source system ensures that no central authority can influence it. In her words, the most critical feature of Bitcoin is its resistance to external control, a characteristic that makes it appealing to investors and users worldwide.
Though the U.S. may not be embracing widespread crypto transactions yet, Long pointed out that other parts of the world view Bitcoin differently. In many regions, Bitcoin is already playing a larger role in everyday financial transactions. This global variation in usage highlights Bitcoin’s adaptability to different economic environments.
Well, in the US, you might not be buying much with crypto anytime soon, but that’s not true about the rest of the world. Bitcoin is different things to different people. And the most important aspect of Bitcoin is that no one controls it. It’s just code maintained by engineers in an open source, decentralized manner.
Investment or Payment System?
Long acknowledged that in the U.S., Bitcoin is largely treated as an investment asset. She noted the increasing interest from institutional investors as Bitcoin ETFs and similar products become more mainstream.
However, while the focus is on its value as an investment, Long stressed that Bitcoin also functions as a payment system. Over time, Bitcoin has shifted from being a low-cost payment solution to what she now describes as a high-value transfer system due to rising transaction costs.
Bitcoin’s evolution in the U.S. market reflects these dual functions. According to Long, it was initially a payment system but has since become a store of value, frequently compared to digital gold, due to its inability to be diluted by central banks.
Bitcoin’s Future Amid Competing Technologies
When asked about Bitcoin’s place in today’s technology space, Long acknowledged that cryptocurrency has seen shifts in attention. While technologies like AI have gained prominence, Bitcoin continues to hold its own.
She emphasized that despite these changes, Bitcoin’s unique characteristics and resistance to control will keep it relevant. Long’s insights reaffirm Bitcoin’s position as both a valuable investment and an alternative payment system.
DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
