Bitcoin Won’t Win as a Currency. It Will Win as Collateral.

If Bitcoin is so perfect on paper, why is real-world usage still crawling? The answer isn’t what you think.

Bitcoin is 15 years old (Yea I know right?), yet merchants still barely use it. Despite all the hype, Bitcoin’s real-world spending footprint hasn’t meaningfully grown.

Today, the majority of activity is still:

• Exchange ↔ Exchange churn
• Custodian reshuffling
• Speculative positioning

Actual merchant usage? Still hovering around 2–3%. We can literally see usage nose-dive whenever volatility spikes.And that raises uncomfortable questions:

• Is Bitcoin becoming purely speculative?
• Is the “greater fool theory” the only thing holding price up?

Bitcoin is already:

• Globally priced
• Borderless
• Instantly verifiable
• Deeply liquid
• Transparent and on-chain
• Capped and predictable

It has all the traits of a perfect economic engine, but we still don’t use it as money.

Why? Because every system today forces users to sell their Bitcoin in order to spend it.

Even the so-called “crypto cards” don’t solve this. You may think of this as a “Crypto payment” but in the backend they are simply selling your crypto for dollars (Sometimes their own crypto off-chain for faster liquidity and then transfer the dollars through traditional banking infrastructure). A typical flow for say an International swiping of their card would be:

BTC → Sell to USD → Convert to local currency → Merchant gets paid

You can naturally see the problem here:

1. Double-converting every transaction
2. Eating spread and markup fees
3. Settling off-chain for speed
4. Offering no real “Crypto-Payment”, they just rapidly sell crypto for cash.

They look modern on the surface, but underneath, it’s the same inefficient plumbing we’ve had for decades. These are not crypto-native systems. I sometimes feel they are just “Gimmicks” to raise investor money.

What if we stopped trying to “spend Bitcoin” and instead used Bitcoin as proof of creditworthiness?

Your BTC becomes:

• Your collateral
• Your proof of wealth
• Your credit signal

Why BTC is a perfect collateral:

1. Limited supply ensures rarity: Bitcoin’s supply is permanently capped at 21 million coins (over 93% are already mined in 2025)
2. Most decentralised, risk-minimised protocol: runs on thousands of globally distributed nodes and is the world’s most robust blockchain against attacks/censorship.
3. Transparency, instant settlement capability, and resistance to manipulation.
4. Held mostly by individuals: providing network stability and decentralised control.

Think this:

You have BTC in your wallet = Your creditworthiness. When you “spend”, BTC gets converted to a Stablecoin which is used for settlement.

We do this as Stablecoins already solve the Biggest issue with fiat, Cross-Border settlements, not to mention all the other goodies that come with digital goods.

This system does three powerful things:

1. It turns Bitcoin from an idle asset into productive financial energy.
2. It removes volatility from daily spending.
3. It finally links Bitcoin to actual economic activity, not speculation.

That’s how Bitcoin stops being a “novelty good” and becomes the foundation for a usable financial system.

What I am exploring right now

A crypto-backed credit system where BTC becomes your creditworthiness, which ultimately unlocks Global spendings without any of the FX hurdles or loopholes, as well as rapid domestic settlements. I feel this opens the door to an entirely new class of economy, one where digital ownership directly translates into real-world financial capability.

If you’re thinking about the future of digital credit, Bitcoin collateralization, or the next layer of crypto utility, happy to connect!

Reach me at arjun10@sas.upenn.edu for some conversations.

Appendix: Key Data Sources

• World Bank Remittance Prices Worldwide (2025)
• McKinsey Global Payments Report (2025)
• Statista, Cross-border payments statistics (2025)
• Visa, Global Money Movement Trends (2025)
• Fortune Business Insights, Cross Border Payment Market Size (2025)
• Finance Yahoo, Cross Border Payments Market Report (2025)
• Grandview Research, Global Cross Border Payments Market (2025)
• CoinDesk, Who Holds Bitcoin in 2025?
• River Financial, Who Owns the Most Bitcoin in 2025?
• ZoneWallet.io, Latest Bitcoin Ownership Distribution (2025)
• TradingView, Who Controls the Bitcoin Market in 2025?
• Comparative market analysis (real estate, equities, crypto):
• Morningstar, Gold vs. Bitcoin: Safe-Haven Debate Shifting (2025)
• VanEck, Bitcoin vs. Ethereum in 2025: Comparison & Outlook
• Digiconomist, Cryptocurrency Decentralization Metrics
• Bitcoin attributes and use as collateral:
• Kraken, How Many Bitcoins Are Currently In Existence? (2025)
• Investing.com, Bitcoin as Bank Collateral (2025)
• Bitcoin Magazine, Expanding Global Liquidity and Bitcoin Price (2025)
• Chainalysis: 60% of Bitcoin is Held Long Term as Digital Gold. What About the Rest? (2020)