Real Use Cases Will Only Determine Bitcoin’s Status as ‘Digital Gold’, Says ICE Chief
Jeffrey Sprecher, Chief executive of Intercontinental Exchange (parent of NYSE), spoke at length about Bitcoin during the company’s quarterly earnings call last week. He spoke about Bitcoin becoming a long-term store-of-value and its status as ‘Digital Gold’.
He mentioned that for Bitcoin to become the digital alternative to the yellow metal, it is prerequisite that it should first have daily transactions in real use-cases. ICE itself has launched its Bakkt platform to bring cryptocurrency usage in daily life.
“We don’t think that that that whole space will be relevant and grow unless there are real use cases and we do … think that a use case is going to be the digital transfer of value through payments,” said Sprecher.
In September 2019, the Bakkt platform went live hosting its native physically-settled Bitcoin futures contracts in the market. Bakkt has also partnered with coffee retail giant Starbucks allowing its customers to directly spend their Bitcoins for their purchases.
Sprecher added that even many of the Bakkt employees consider Bitcoin as digital gold. He considers this to be very premature saying that “Because I’m old I think of [how] gold became a store of value because at one point it was a currency. We had gold coins, it was in circulation, and over time because of the nature of its ability to spend, … it became a store of value and today, you know, in a crisis we all accept gold as a form of payment.”
But Sprecher remains confident of Bitcoin’s ability to achieve the ‘gold’ status considering its mining and development capabilities. The ICE Chief also said that he would like to see Bitcoin in direct use of goods purchase instead of the recent trend of converting Bitcoin to fiat and using that fiat in the marketplace.
However, with Bitcoin being very volatile in nature, holding the Bitcoin directly in digital wallets could be a risky gameplay for investors. Maybe, if some can introduce a stablecoin as an intermediate against one’s Bitcoin holdings, then Bitcoin spendings could also see a rise.
A wallet that facilitates real-time seamless conversion between Bitcoin and the stablecoin can be a go-to choice for consumers and investors. This way, one can spend direct Bitcoins or stablecoins while protecting investor capital against high market volatility.
As per the latest developments, Bakkt plans to launch its crypto consumer app by H1 2020 and its Bitcoin Options contracts by the next month, December 2019.
Sprecher said that with the new derivatives products, Bakkt plans to develop a more regulated environment in the Bitcoin ecosystem. But he admitted that institutional investors are currently still skeptical of entering the crypto market and waiting on how regulators deal with the crypto space first. He said: “You know, retail global retail customers have been very comfortable for whatever reason being early adopters on unregulated platforms that call themselves exchanges, but really have no particular regulatory oversight. We think there’s an opportunity as what we’re building out with Bakkt to bring that whole thing into a more transparent regulatory footprint and lend our expertise.”