Bitcoin might become “digital gold,” but first it needs to be used more in everyday business, Intercontinental Exchange’s chief executive said.
During a quarterly earnings call Thursday, ICE head Jeffrey Sprecher said that he sees use in transactions as the prerequisite to bitcoin becoming a long-term store of value. The company’s Bakkt subsidiary, which runs a bitcoin futures market, announced this week that it is developing an app for consumers to buy goods from merchants, beginning with Starbucks.
A number of Bakkt’s employees already see bitcoin as digital gold, Sprecher said. (So, it should be noted, does much of the current bitcoin community.) To him, that’s premature.
“Because I’m old I think of [how] gold became a store of value because at one point it was a currency,” he said. “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.”
Bitcoin may follow a similar trajectory, Sprecher said, citing its development and mining capabilities. He added:
“We don’t think that that that whole space will be relevant and 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.”
But unlike bitcoin’s critics, Sprecher sees this as plausible. “It may well be that, rather than convert bitcoin to fiat currency and then use [that] fiat currency to buy goods and services, merchants and users will accept bitcoin directly,” he said.
Parties who do transact directly with bitcoin would avoid the foreign exchange costs associated with converting back and forth between fiat.