The use of bitcoin in e-commerce is declining. This is evidenced by the results of a study conducted by the blockchain start-up Chainalysis Inc.
The report says that after the peak of activity in September ($411 million), the turnover of the largest processing-oriented processing services went down. By May 2018 this figure was already $60 million.
In June of this year, this indicator slightly increased – up to $69 million, but this figure is several times less than for the same period last year ($270 million).
Causes of a decline in interest
According to Nicholas Weaver, senior researcher at the International Institute of Computer Science, the irreversibility of bitcoin-transactions is a problem, especially when a trading company or consumer faces fraud.
Senior Economist at Chainalysis Kim Grauer, is confident that the active use of cryptocurrency for everyday calculations is hampered by still fairly high transaction fees. According to him, they make inexpedient the purchase of inexpensive goods.
The decline in activity in the use of bitcoin for purchases coincided with the peak of speculative demand for bitcoin when in December last year its price almost reached $20,000. After a deep drop to below $6,000, in July this year, the price of BTC began to show a fairly sharp recovery. However, this did not serve as a catalyst for demand for bitcoins for everyday purchases.
Grauer is sure that the wide distribution of bitcoin as a means of exchange is hampered by its still high volatility, even if the price of BTC goes up.
“When the price grows as rapidly as last year, you can lose $1,000 per day if you spend bitcoins,” he said.
Due to a decline in demand for bitcoins and high volatility, Stripe and Expedia services ceased to work with him. According to experts, this trend contains a negative signal for long-term investors who rely on the fundamental values of cryptocurrency and, in particular, on the growth of the use of bitcoin as a means of exchange.
Not everything is so gloomy
However, the main commercial director of BitPay processing Sonny Singh is not discouraged. According to him, despite the fact that bitcoin is almost not used to buy a conditional cup of coffee, the cryptocurrency is increasingly used to pay for freelancers.
“Over the past six months, we have seen a large surge in companies’ growth, which are calculated with suppliers of bitcoin. Among them: legal and accounting firms, hosting companies, landlords and software providers,” he said.
Singh also stressed that, compared to last year, the number of companies accepting payment for cryptocurrency increased fivefold.
Bitcoin enthusiasts continue to buy expensive digital goods for digital currency, including furniture or even sports cars. In particular, representatives of the retail giant Overstock reported a two-fold increase in sales of goods for cryptocurrency compared to last year. The company also noted that it was best for bitcoins to sell furniture and laptops.