MARA CEO Fred Thiel: Bitcoin’s Chance to Become a Payment Method Has Passed

TLDR:

• MARA CEO Fred Thiel says Bitcoin’s payment-method window has closed for good.
• Price volatility makes Bitcoin unreliable for high-volume commercial transactions today.
• Thiel expects stablecoins to dominate AI-related crypto payments going forward.
• Low transaction fees show Bitcoin’s network wasn’t built for payment volume.

Fred Thiel, chief executive of Bitcoin miner MARA, said Bitcoin’s chance to become a widely used payment method has passed. He shared this view during a July 23 interview with Natalie Brunell.

Thiel explained that high-volume commercial transactions require price stability that Bitcoin cannot currently provide.

He expects stablecoins to handle most crypto payments tied to artificial intelligence in the future. Bitcoin, he added, still holds value as a store of wealth outside centralized financial systems.

Why Price Swings Limit Bitcoin’s Use in Commerce

Thiel pointed to the mechanics of commercial transactions as the main obstacle for Bitcoin as currency. Businesses that process thousands of transactions per second need predictable pricing to manage thin profit margins.

Even small shifts in Bitcoin’s price can change the value received during a sale. This makes it difficult for merchants to rely on Bitcoin for daily operations.

“For Bitcoin to function effectively as a payment method, two key elements are crucial: stability in the value of the medium of exchange and the ability to handle a high volume of transactions efficiently,” Thiel said.

Stablecoins, pegged to fiat currencies like the US dollar, avoid this problem entirely. They offer consistent value that businesses can plan around without added risk.

Thiel said this stability is why stablecoins are better suited for high-frequency payment systems. Companies exploring AI-driven commerce are likely to adopt stablecoins for these use cases.

Transaction speed adds another layer to the challenge facing Bitcoin. Commercial environments often require near-instant settlement to keep operations running smoothly.

Bitcoin’s network was not originally built to handle this kind of transaction volume. Newer payment rails built around stablecoins are designed with speed and scale in mind.

Thiel’s comments reflect a broader shift in how the crypto industry views Bitcoin’s role. Rather than positioning it as a currency, many now treat Bitcoin as digital collateral.

Bitcoin’s Security Budget and Its Role as a Store of Value

Bitcoin’s original design assumed transaction fees would eventually fund its security budget. “We’ve seen that transaction fees have remained remarkably low, often at all-time lows,” Thiel noted.

This suggests the network’s incentives are not built around supporting payment volume. Miners currently rely more heavily on block rewards than transaction fees for revenue.

This dynamic reinforces the idea that Bitcoin was not designed for everyday spending. Instead, its strength lies in offering a way to hold assets outside traditional banking systems.

Investors continue to use Bitcoin to move value across borders quickly. It also serves as a hedge against currency devaluation in unstable economies.

Thiel maintains a long-term positive outlook on Bitcoin despite these limitations. “While Bitcoin will undoubtedly continue to exist and serve as a valuable asset for those seeking to hold wealth outside of traditional financial systems, its role as a daily payment method seems unlikely to materialize,” he said. The asset’s usefulness, in his view, has shifted rather than diminished over time.

Institutional interest in Bitcoin as a treasury asset has grown alongside these views. More companies now hold Bitcoin as a hedge rather than a payment tool.

This trend supports Thiel’s argument about Bitcoin’s evolving role in finance. Stablecoins, meanwhile, are positioned to fill the payment gap Bitcoin leaves behind.

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