Bitcoin’s Evolution: From Digital Cash to Savings Asset & L2 Needs

Originally conceived as a radical experiment in peer-to-peer digital cash, Bitcoin’s narrative has fundamentally shifted alongside the global economic landscape. In an era where traditional savings are steadily losing purchasing power to inflation, BTC is now predominantly framed as a modern savings tool—a form of ‘digital gold’ designed to be held rather than spent. This perspective positions Bitcoin as a hedge against currency devaluation, sitting alongside fiat as a store of value.

However, according to analyst Ben SAN, this increasingly common framing has become ‘incomplete and ultimately wrong.’ In a recent post on X, SAN argued that Bitcoin’s ultimate purpose is not to coexist with fiat currency as another savings vehicle. Instead, its design intends for it to replace fiat as the foundational monetary and financial base. The critical distinction is that for BTC to operate as this base, it must function as usable money at a global scale, a capability its current architecture limits.

For Bitcoin to operate as a practical form of finance, it requires the capacity for execution, settlement abstraction, fast interactions, and cost-efficient transactions—attributes essential for daily usability. As Ben SAN notes, Bitcoin’s base layer, or layer 1, is architecturally designed for finality and network neutrality, not to satisfy these high-throughput, low-cost requirements. This design is intentional; the base layer prioritizes security and decentralization over speed.

This inherent limitation is why experts assert that Bitcoin needs layer-2 (L2) scaling solutions to operate as true money. ‘Once you accept that Bitcoin needs L2s to be usable as money, you stop asking whether alts are competing with Bitcoin and start asking whether they are serving Bitcoin,’ stated the expert. This perspective reframes the relationship between Bitcoin and other cryptocurrencies, or altcoins. Acceptance within the Bitcoin-first community, according to this view, would not come from alternative monetary assets competing with BTC’s store-of-value proposition.

Instead, legitimacy for any non-BTC asset would be earned only by systems that keep Bitcoin as the core unit of account and native asset while crucially extending its usability without weakening its security guarantees. In such systems, auxiliary tokens might be introduced, but solely in cases where Bitcoin is structurally incapable of performing specific coordination or incentive functions, particularly around expressiveness and yield generation.

Parallel to these technical and philosophical debates, significant on-chain activity is painting a bullish picture for Bitcoin’s near-term price trajectory. Crypto analyst Mattertrades highlighted that Bitcoin is trading above a key weekly resistance level, with the path looking ‘slow and clear.’ This technical setup coincides with substantial institutional buying.

The catalyst this week was Michael Saylor, executive chairman of MicroStrategy, stepping in with his largest Bitcoin purchase since July, acquiring $1.5 billion worth of BTC. Mattertrades points to a powerful historical precedent: ‘The last time he did this, BTC surged to $126,000.’ This large-scale accumulation is seen as a significant signal of conviction from one of the asset’s most prominent corporate advocates.

This bullish sentiment is further bolstered by bullish Morgan Stanley Capital International (MSCI)-related news, which Mattertrades notes ‘actually attracted more buyers.’ The combination of a major player like Saylor making a landmark purchase and positive institutional developments from entities like MSCI creates a foundation for market reflexivity. ‘This is how a bullish case quietly forms,’ concluded Mattertrades. The theory of reflexivity suggests that when a notable figure like Saylor accumulates such large amounts, it can attract other institutional and retail players to follow suit, creating a self-reinforcing cycle of buying pressure and upward price momentum.