How institutional networks are preparing for Bitcoin integration

The following is a guest post from Shane Neagle, Editor In Chief from The Tokenist.

Half a year after Bitcoin ETFs launched, it is safe to say that they have been the most successful ETF launch in history, having generated a $309.53 billion volume. Just within the first day of trading, spot-traded Bitcoin ETFs pulled in $4 billion, crushing the previous record holder, Gold ETF (GLD), which took 3 days to top $1 billion in inflows.

This is all the more impressive as Bitcoin is a novel asset compared to ancient gold. The trend clearly points to Bitcoin being more fit for purpose in the digital age. But what is that purpose?

BlackRock’s Head of Thematic & Active ETFs, Jay Jacobs, recently noted that Bitcoin is a “potential hedge against geopolitical and monetary risks”. By now, most people are aware that central banks’ ability to tamper with the money supply brings many moral hazards, from record-breaking budgetary deficits to inflation as an extra layer of taxation to cover those wild spending sprees.

Gold is less suited to counter that ability because it is physical, confiscatable, and not truly limited. Because Bitcoin is one-tenth the size of the gold market, its price is more volatile, but it is also a more attractive gains machine.

Now that Bitcoin ETFs have simplified and institutionalized access to more exciting digital gold, which steps are needed to ensure that trend continues?

Ensuring Network Reliability

Owing to its proof-of-work (PoW) consensus mechanism, Bitcoin is dual-natured. It is a digital asset anchored into the physical reality of energy and hardware. This underlying foundation gives Bitcoin its value as a decentralized counter to central banking.

In turn, the components of that foundation, the Bitcoin network, have to scale up to continue the institutional intake. Presently, the Bitcoin network handles around 412k transactions per day, nearly double from two years ago. Although the median transaction fee oscillates depending on network load, it rarely exceeds $5 per transaction.

In parallel, their networks have to scale to ensure the Bitcoin network handles orders of magnitude greater load coming from institutions. To increase their stability and robustness, they have to tackle multiple network components, from software and servers to hardware and internet connection.

Scalable Blockchain Solutions

Just as IBM made significant contributions to developing current large language models (LLM), the legacy computer company also made a…