CoinShares Analysts Tip Bitcoin-Based ‘Rival’ to Shake Stablecoin Space

CoinShares Analysts Tip Bitcoin-Based ‘Rival’ to Shake Stablecoin Space

UTC by Mayowa Adebajo · 3 min read
CoinShares Analysts Tip Bitcoin-Based ‘Rival’ to Shake Stablecoin Space
Photo: Pixabay

Analysts believe that any Bitcoin-based projects at this time will not only “rival the speed and cost” of alternatives but also retain the undeniable stability of the Bitcoin infrastructure.

Analysts from crypto investment firm CoinShares have predicted the emergence of a Bitcoin-based stablecoin in 2024. According to a January 22 outlook report, it looks like the right time for Bitcoin to float a stablecoin project that will offer a highly competitive speed and cost alternative to what the majority of the modern stablecoins currently offer. An excerpt from the publication reads:

“Altogether our prediction is that a Bitcoin project focused on competing in the modern stablecoin sector will be made easily accessible to users this year.”

Meanwhile, the report was put together by CoinShares’ head of Bitcoin research, Christopher Bendiksen, and analyst Matthew Kimmel. Although the duo admitted that Bitcoin-based stablecoins had been created before, they believe that any such projects at this time will not only “rival the speed and cost” of alternatives but also retain the undeniable stability of the Bitcoin infrastructure. That is not to mention that such a Bitcoin-based stablecoin project will become easily accessible to users, the duo added. Bendiksen and Kimmel wrote in a part statement:

“The Bitcoin blockchain boasts the longest history, greatest stability, least technical debt, and strongest assurances.”

Massive Integrations to Make Bitcoin-Based Stablecoin a Huge Success

Bendiksen and Kimmel also presume that businesses and other Bitcoin plugins will play a major role in the quick popularity and usage growth of this rival stablecoin. That is in case it emerges. They expect that to happen as long as the businesses continue to integrate stablecoin spending. In the long run, this could even be a major boost for Bitcoin’s monetary properties and its decentralized nature, the team said.

CoinShares analysts were also quick to point out that despite the positivity around the prediction, some technical issues remain. They mentioned how records show that stablecoin users would rather use faster and lower-cost networks. And according to Bendiksen and Kimmel, this could pose a serious problem for adoption.

“…History has shown that stablecoin adoption tends to flock towards the platform offering the cheapest transaction costs and highest speed,” the statement reads.

As earlier mentioned, several Bitcoin infrastructure firms have created stablecoins on Bitcoin’s base layer. Trust Machines names the likes of Stacks, RSK and Liquid Network as such firms to have done so. In May 2023, Coinspeaker reported that the founder of BitMEX Arthur Hayes was eyeing such a project.

Some other United States dollar-denominated stablecoins have also launched on the Bitcoin layer-2 network. They include Dollar on Chain (DoC), Liquid-based Tether (L-USDT), USDA, and rDAI (RDAI) among others.

It is expected that all these stablecoins will eventually find their way to Bitcoin’s base layer. However, it’s not “currently possible” to do so, per Trust Machines.

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