The traditional narrative around Bitcoin adoption has often centred on metrics like the number of wallets downloaded, nodes running, or merchants accepting Bitcoin as payment.
While these indicators certainly matter, they miss a more profound shift occurring in the global financial landscape: Bitcoin’s growing role as a store of value and its increasing share of the world’s wealth storage.
If there were ever a common critique of Bitcoin (of which there are many), it would have to be the medium of exchange argument.
How can Bitcoin be money if I can’t buy a coffee with it?
Very few people are buying coffee with Bitcoin. Why?
- Merchants don’t accept it
- Gresham’s Law encourages the hoarding of good money
Fiat has a lot of things wrong with it, but a medium of exchange problem isn’t one of them. Even in countries that have seen their currencies lose value at staggering rates of 25, 50, and 100% annually, those fiat on-ramps are still available from physical cash to digital settlement and, of course, credit creation.
Most of us come to Bitcoin not because we have a problem spending our fiat, but because we have a problem storing the cash balance we have right now.
If I save a cash balance that can acquire 1kg of beef, I’d like to purchase 1kg of beef today, tomorrow and 10 years from now with that same balance.
I don’t want to buy mince meat, I don’t want to buy soy beans, I don’t want to substitute goods because my cash balance is eroding, I want my beef, or we’re going to have beef!
Simple as!
To truly understand Bitcoin adoption, we need to look at how much of the world’s cash balances and savings are flowing into this asset class. This perspective reveals a more nuanced and potentially more significant adoption curve than simply counting retail users, wallet addresses, hodlers or daily trading volumes.
The Evolution of Bitcoin’s Value Proposition
Bitcoin began as a peer-to-peer electronic cash system, designed primarily as a medium of exchange.
However, its fixed supply cap of 21 million coins and predictable issuance schedule have progressively shifted its narrative toward that of “digital gold” or “store of value.”
This evolution makes sense when we consider monetary history. New forms of money typically gain adoption first as stores of value before becoming widely used mediums of exchange.
Gold followed this path thousands of years ago, and Bitcoin appears to be on a similar trajectory.
Institutional Adoption: Following the Money
The clearest signal of Bitcoin’s maturation is the increasing allocation from institutional investors and corporate treasuries. Companies like MicroStrategy, Square (now Block), and Tesla have converted portions of their cash reserves into Bitcoin.
This isn’t merely experimental—it represents a fundamental reassessment of treasury management strategy in an era of currency debasement and inflation concerns.
These institutional moves are particularly significant because they represent a shift in how professional money managers view Bitcoin—not as a speculative asset but as a legitimate treasury reserve asset. When publicly traded companies allocate billions to Bitcoin, they’re signalling to the market that Bitcoin has achieved a level of legitimacy and stability worthy of corporate treasury allocation.
Central Bank Digital Hoarding
Perhaps even more telling is the quiet accumulation of Bitcoin by central banks. While most publicly deny holding Bitcoin directly, many are believed to be accumulating positions through proxies or sovereign wealth funds.
The motivation is clear: diversification away from the dollar-dominated global financial system and preparation for a multi-polar currency world.
This subtle shift represents an extraordinary evolution in Bitcoin’s status—from a fringe alternative currency to a component of national reserves.
Even a small allocation from global central banks would represent an enormous inflow of capital into the Bitcoin ecosystem.
The True Measure: Percentage of Global Wealth
The most meaningful metric for Bitcoin adoption isn’t user counts but rather what percentage of global wealth is stored in the asset. Currently, Bitcoin’s market capitalisation represents only a tiny fraction of global wealth storage—less than 1% compared to gold’s roughly 10% and fiat currencies’ much larger share.
This perspective helps explain why Bitcoin’s price can increase dramatically without necessarily seeing corresponding growth in everyday retail usage.
As more institutional capital, corporate treasuries, and potentially central bank reserves allocate even small percentages to Bitcoin, the price effect is substantial due to Bitcoin’s fixed supply.
Saving vs. Spending: Different Adoption Curves
Viewing Bitcoin primarily as a savings technology rather than a payment network also explains the seemingly slow adoption for everyday transactions. People naturally prefer to spend depreciating assets (fiat currencies) while holding appreciating ones (Bitcoin).
This behaviour, known as Gresham’s Law, means we shouldn’t expect rapid adoption of Bitcoin for daily purchases until it reaches price stability, likely years or decades away.
Instead, the more natural adoption path is through savings allocation—people gradually increasing their Bitcoin holdings as a percentage of their total wealth. This adoption vector is much harder to track than transaction volumes, but represents a more fundamental integration into the global financial system.
The Importance of Financial Infrastructure
Paper Bitcoin, like it or not, is now part of the equation, and gobbles up a significant portion of Bitcoin, around 1 million coins now back paper products.
The development of Bitcoin financial infrastructure—exchanges, custodians, ETFs, futures markets, and lending platforms—has been crucial for institutional adoption and flooding of capital into the asset class. These services make Bitcoin accessible to entities that can’t or won’t self-custody their assets, opening the door to trillions in managed capital.
The approval of Bitcoin ETFs, for instance, created a regulated vehicle for pension funds, endowments, and other institutional investors to gain Bitcoin exposure without directly holding the asset. These financial products have accelerated the flow of traditional capital into the Bitcoin ecosystem.
Now, paper products carry their own risk, and these holders will have to deal with their shortcomings, but it nevertheless funnels cash balances into Bitcoin.
Geographic Disparities in Adoption
Bitcoin adoption follows different patterns across regions. In developed economies with stable currencies, Bitcoin primarily serves as an investment vehicle and inflation hedge.
In contrast, countries with unstable currencies or limited banking access may see Bitcoin used more actively for remittances, savings, and even daily transactions.
This bifurcated adoption path suggests that measuring Bitcoin’s success by any single metric misses the bigger picture of how it serves different needs across various economic contexts.
Long-term Implications
As Bitcoin captures an increasing share of global wealth storage, its volatility should theoretically decrease. More stable values would then enable its broader use as a medium of exchange, potentially completing the cycle from store of value to everyday currency.
However, this transition may take decades, and Bitcoin might remain primarily a savings technology rather than a payment network. This isn’t a failure of the system but rather a natural evolution of its role in the global economy.
Wealth Self Storage
Bitcoin adoption isn’t all about counting wallets or monitoring merchant acceptance rates; these are fun metrics to keep track of and cheer on as NGU, but the real measurement of note is how much of the world’s free cash flows have opted to use Bitcoin as their self-storage unit.
As Bitcoin moved from 0 to 1%, no one cared, except for a select few, but as it continues to outperform other asset classes, and enrich those who choose to use Bitcoin, more of those savings will be absorbed, and 1% becomes, 2%, becomes 10% and we really start cooking.
So why is it about tracking how much of the world’s wealth is stored in this new asset class?
The more wealth there is in this ecosystem, the more participants will use those savings, and this will drive the medium of exchange. As more people have larger cash balances in Bitcoin, they’ll have little to no choice but to spend it and be forced to push others to accept it for goods and services.
By this measure, Bitcoin adoption is progressing steadily, as individuals, corporations, and potentially even governments gradually shift portions of their savings into the Bitcoin network.
This perspective suggests that Bitcoin’s journey is just beginning; we’re barely at $2 trillion on a good day.
Apple computers, one single company, holds more wealth than that, so Bitcoin has a long way to go.
As a technology for storing value, Bitcoin has the potential to capture significant portions of the global wealth storage market, currently dominated by fiat currencies, stocks, bonds, real estate, and precious metals. Even capturing a small percentage of these markets would represent an enormous increase from Bitcoin’s current position.
The Bitcoin adoption story, properly understood, is about the gradual shift of the world’s savings into a new, digital, non-sovereign store of value—a process that may take decades to unfold but could fundamentally reshape the global financial landscape.
