August 02, 2018 203By Nathan Bentley
“After peaking at $411 million in September, the amount of money the largest 17 crypto merchant-processing services received in the best-known cryptocurrency has been on a steady decline, hitting a recent low of $60 million in May, according to research startup Chainalysis Inc. conducted for Bloomberg News. While the amount merchant services such as BitPay, Coinify and GoCoin received increased slightly in June to $69 million, it was still a far cry from the $270 million received a year ago, Chainalysis found.”See more for yourself, here. Why aren’t people spending Bitcoin? There’s a few reasons for this, high transaction fees and of course, a tendency to hold Bitcoin instead of spend it. So, we can’t blame the spending decline on simply just volatility, in my opinion at least anyway. We have to look at it this way. As it stands, why would people use Bitcoin to purchase an everyday item when FIAT is still easier and more viable? Bitcoin might be great for huge purchases, but for a general grocery shop, why would anyone want to submit to high transaction fees to purchase their shopping? As Bloomberg put it:
“The way Bitcoin is being utilized is changing as well. Because the fees to process a transaction in Bitcoin can be steep and varied -- they peaked at $54 in December, but are down to less than $1 today -- not many people are using the coins for small transactions, like buying a cup of coffee. They are spending the virtual currency more to pay vendors like freelancers located overseas: For those cases, using Bitcoin can be cheaper and faster than using traditional financial services.”So, what is the verdict? Overall, when volatility reduced significantly, it should still allow for a greater spending of Bitcoin, because overall adoption becomes more likely. It’s unfair for Bloomberg to blame volatility as they key reasoning behind the decline here. There are so many contributing factors that put pressure on Bitcoin spending that until these are addressed, the industry will remain super volatile. Spending will go up and down as will the markets and values.