The price of Bitcoin continues to dominate headlines, with projections placing it at $150,000, $185,000, or even $200,000 by year-end 2025.
Yet beneath the bullish sentiment lies a more fundamental question that rarely surfaces in financial media: does Bitcoin need another price spike, or does it need something far more substantial—a functioning economy that makes the digital asset genuinely useful?
The distinction matters because the current narrative of Bitcoin centers almost entirely on financial appreciation. Institutional investors view it as a portfolio diversifier and hedge against inflation. Central banks hold it as a strategic reserve asset, comparable to gold. Corporations add it to their treasuries for yield generation and capital preservation.
This institutional embrace has been remarkably swift, transforming Bitcoin from fringe speculation into legitimate financial infrastructure. By mid-2025, global Bitcoin ETF assets under management had reached $179.5 billion, with corporate digital asset treasuries tripling to $150 billion. Yet these developments, while significant, tell only half the story.
The Gap Between Price and Purpose
The remarkable institutional adoption of Bitcoin paradoxically reveals the asset's most critical shortcoming: it has become successfully embedded into the financial system precisely by abandoning its original economic function. Bitcoin was conceived as a peer-to-peer electronic cash system, a medium of exchange that would operate independently of traditional banking infrastructure.
Today, Bitcoin settles approximately 300 transactions per second on its base layer, while Visa processes 65,000 transactions per second. This technical limitation, combined with price volatility and merchant friction, has rendered Bitcoin unsuitable for everyday commerce. As a result, Bitcoin has retreated into a role it was never designed for: a store of value, competitive with gold or other hard assets.
This transformation is not accidental. It reflects the path of least resistance in a world where traditional financial infrastructure remains dominant. Stablecoins, not Bitcoin, have emerged as the practical settlement layer for digital commerce.
In 2025, stablecoin payment volume surged from less than $2 billion to over $6.3 billion in just two years, with platforms like Shopify and Stripe enabling merchants to accept USDC on Ethereum layer-2 networks with near-zero fees. Meanwhile, Bitcoin sits largely idle as a speculative asset and institutional reserve, waiting for the next market cycle rather than driving economic activity.
The Economic Infrastructure Imperative
For Bitcoin to become truly transformative—for it to matter beyond quarterly price movements—it requires something that no single asset can provide alone: an ecosystem of complementary services, infrastructure, and adoption that creates actual economic demand.
An economy built on Bitcoin would require several interconnected elements that do not yet exist at scale.
First, transaction finality and speed would need to reach parity with existing payment systems. The Lightning Network and other layer-2 solutions have made progress, enabling faster, cheaper transactions, but these remain niche technologies adopted primarily by enthusiasts rather than mainstream users.
Millions of merchants have no incentive to implement Bitcoin infrastructure when traditional payment rails, while imperfect, are reliable and well-established.
Second, Bitcoin requires circular economic activity—a scenario where merchants accept it, consumers spend it, and the asset maintains sufficient stability to enable genuine price discovery for goods and services rather than endless speculation.
Today's Bitcoin economy lacks these feedback loops. Few retailers accept Bitcoin directly; those that do immediately convert it to fiat currency through intermediaries like Flexa. This arrangement provides the veneer of adoption without the substance of economic integration.
Third, regulatory clarity at the operational level, rather than just the strategic level, remains inconsistent across jurisdictions.
While institutional custody has matured and central banks have embraced Bitcoin as a reserve asset, retail merchants and small businesses still face legal ambiguity regarding tax treatment, reporting obligations, and consumer protection standards. Without this clarity, businesses cannot rationally invest in Bitcoin integration.
The Institutional Anomaly
The current wave of Bitcoin adoption creates a peculiar inversion: the asset is simultaneously more legitimate and more isolated than ever before. Institutions hold approximately 10% of all circulating Bitcoin, with governments treating it as a strategic reserve comparable to gold.
Yet this legitimacy derives entirely from Bitcoin's function as a store of value for sophisticated actors with high risk tolerance. The broader economy remains untouched.
Consider the contrast with stablecoins, which have found authentic economic use precisely because they solved a real problem: frictionless digital payments at scale. Stablecoins enable migrant workers to send remittances with lower fees and faster settlement than traditional banks.
They enable cross-border commerce without currency conversion costs. They provide dollar-denominated value in economies experiencing local currency instability. By 2025, stablecoin transaction volume had reached $32 trillion, with experts projecting stablecoins could capture 20% of global cross-border payments by 2030.
Bitcoin has achieved none of these economic use cases at meaningful scale. The narrative around Bitcoin as "digital gold" succeeds precisely because it imports meaning from a 5,000-year-old commodity.
But gold became a store of value because it had genuine economic uses—in jewelry, industry, and dentistry—before it became a reserve asset. Bitcoin, by contrast, has been stripped down to pure financial abstraction, a pixel on a ledger whose value depends entirely on the belief that others will pay more for it tomorrow.
The Missing Economic Layer
A functioning Bitcoin economy would require what no single technology or price level can provide: coordination across multiple stakeholders around a shared purpose.
This would include clear incentives for merchants to accept Bitcoin, mechanisms for consumers to spend it without friction, infrastructure for the intermediate steps of settlement and clearing, and confidence that price stability would allow economic participants to make rational decisions based on factors other than pure speculation.
The Lightning Network represents a technical step toward this vision, enabling payments to settle in milliseconds with fees measured in fractions of a cent. But technology alone does not create an economy. The Interledger Protocol and similar standards exist to enable interoperability between blockchain systems and legacy banking infrastructure, yet their adoption remains limited to niche applications.
Meanwhile, the infrastructure that does scale—payment processors, merchant solutions, wallet providers—consistently settles in fiat currency rather than maintaining Bitcoin throughout the transaction lifecycle. This reveals the economic reality: Bitcoin is not yet functional as a medium of exchange at scale.
The Path Forward: From Reserve to Utility
Bitcoin's next chapter need not be defined by its price. Instead, it could be shaped by a deliberate effort to build the economic infrastructure that would make Bitcoin genuinely useful for purposes beyond wealth storage.
This would require coordinated development across several dimensions: Layer-2 and scaling solutions that can handle transaction throughput comparable to Visa, merchant infrastructure that makes Bitcoin acceptance as simple as accepting credit cards, regulatory frameworks that clarify tax treatment and consumer protections, and critically, a cohort of early adopters willing to spend Bitcoin rather than hoard it.
The most probable near-term development is that Bitcoin remains a reserve asset while stablecoins become the actual payment layer for digital commerce. This division of labor, while not what Bitcoin's original architects envisioned, reflects economic reality.
Bitcoin benefits from "brand" status—recognition, institutional legitimacy, and perceived scarcity. Stablecoins benefit from practical utility. Together, they could form the foundation of a genuinely decentralized financial system that coexists with traditional infrastructure rather than replacing it.
But this outcome, however rational, represents a fundamental diminishment of Bitcoin's original ambition. The asset has become what the incumbent financial system always wanted: a non-threatening store of value that can be integrated into existing structures without disrupting them. A bull run is certain to generate headlines and reward early holders.
Building an actual economy around Bitcoin—one where the asset drives productivity, enables transactions, and serves real economic needs—would require something far more difficult: sustained coordination, shared purpose, and the willingness to prioritize utility over speculation. Until that foundation is laid, Bitcoin will remain what it has increasingly become: a financial instrument waiting for the next investor cycle rather than an economic system waiting for adoption.
