Looking medium to long term, several factors could bolster bitcoin, including expectations that institutional investors will continue to buy it as a hedge against sovereign debt and currency debasement risk, analysts said. 

BlackRock recently recommended global investors target a 1% to 2% portfolio allocation to bitcoin, adding weight to investor Cathie Wood's view that institutions will gradually increase their allocations to around 7% by 2030, up from 0.5% now, potentially taking bitcoin higher. 

Network improvements could also deepen the coin's appeal as a peer-to-peer payment alternative, allowing people to buy a coffee or croissant with bitcoin without waiting minutes – or paying hefty fees – to do so.  

The key solution to this, the Lightning Network, is gaining traction, analysts say. Operating as a Level 2 payment protocol on the Bitcoin blockchain, it's currently handling millions of transactions within seconds versus Bitcoin's typical 10-minute block time.  

However, Lightning wallets face growing competition for everyday payments from stablecoins,  on networks like Solana or Base, which offer U.S. dollar-pegged stability that removes bitcoin’s volatility barrier.   

In response, infrastructure provider Voltage is working to integrate USDT and USDC stablecoins pegged 1:1 to the U.S. dollar directly onto the Lightning Network. Introducing stablecoins to Lightning’s existing near-instant speed allows Bitcoin’s ecosystem to compete directly with Ethereum, Solana and other smart-contract networks for global digital payments.  

Agentic AI [machine-to-machine] payments, which are rapidly being deployed across retail, banking and manufacturing, could also raise bitcoin’s uptake. While stablecoins are expected to drive most of these payments, bitcoin’s position as the current market-cap leader could see it develop into the ultimate transaction settlement currency.  

As it develops beyond its key "store of value" or "digital gold" utility, bitcoin's value proposition could increase, though the jury is still out over who will eventually dominate decentralized money.  

"The Lightning Network is making progress but it needs to go through its life cycle," said crypto-focused lawyer Carol Van Kleef. "Blockchain technology has ushered in a number of payment options from stablecoins, to Lightning Network to Polygon (which runs on the Ethereum network). All of them are improving transactions for the average person but we still need an industry shake out to determine the final winners." 

Meanwhile, the Digital Asset Market Clarity (CLARITY) Act, the U.S.'s proposed framework for  cryptocurrency regulation, has seen delays after the Senate's Banking Committee approved it on May 14. 

Stablecoin rewards, which could mean users receive up to 8% in returns compared to as much as 4.5% for high-yield traditional savings accounts, are a major sticking point. Opponents also want stronger provisions against money laundering and conflicts of interest.  

"The Clarity Act is a big deal and it's having many problems," said Matthew Tuttle, head of ETF issuer Tuttle Capital Management, adding that a long delay (or eventual amendment) of the legislation could continue to pressure bitcoin.   

The recent rotation toward AI memory hardware and frontier tech is also acting as a headwind and things could get worse before getting better, according to Tuttle.  

Looking further out, Van Kleef highlighted a potential “Black Swan” event for bitcoin – the growing possibility that quantum computers could break its blockchain encryption wall in a few years, allowing hackers to access millions of wallets – a potential threat she said is akin to the Y2K computer scare in 2000. 

"The big issue is whether the appropriate steps are being taken to make Bitcoin quantum-proof, which means rewriting and readapting the code," said Van Kleef. "It's a huge issue."

Google recently said Q-Day, the hypothetical day quantum machines could break common encryption, could come as early as 2029, though others note it could take until 2035. Bitcoin developers are already starting to prepare, with one developer publishing a proposal called BIP 360 in February. 

“The proposal does not activate any changes. It is not a crisis response,” Forbes reported earlier this year, noting that it remains open for review, debate and eventual implementation. “But it puts quantum resistance on Bitcoin's official technical roadmap for the first time – and given the timelines involved, that matters more than it might seem.”