Bitcoin Use for Payments Plummet in 2018
ICOBox co-founder Daria Generalova shares her thoughts on Bitcoin payments declining in 2018
Far less people used Bitcoin (BTC) to pay for commercial transactions in 2018. Payment via BTC dropped about 80 percent from last September, shrinking from $427 million to $96 million in a year. Usage declined steadily throughout the year and several major retailers, like Microsoft and Steam, stopped accepting Bitcoin. Several factors have played into the decline.
Less places to spend Bitcoin means less Bitcoin being spent. High volatility has scared off several vendors, making Bitcoin harder to spend in the commercial sector. Only time will tell if these vendors begin accepting Bitcoin payments again, but greater stability makes it more likely.
While all sorts of players jumped into Bitcoin during the meteoric rise at the beginning of the year, most of the people using Bitcoin for payments were likely crypto enthusiasts. Since these people believe in crypto, it’s easy to assume they decreased payment usage as Bitcoin crashed, believing their holdings were undervalued. These users are banking on Bitcoin stabilizing and sustainably increasing in value to make sure their purchasing power is maximized.
The speculators who hopped on board during the boom were not the ones spending Bitcoin in the first place. These users treated Bitcoin solely as investments and many do not even understand how to use BTC to pay for goods. These users have either sold off their BTC or are simply holding it.
Alternative currencies, designed specifically for payments, like Bitcoin Cash (BCH) have also decreased Bitcoin’s prevalence in payments, but the use of all crypto is still down for the year.
2019 could see a rebound in payment rate if BTC value holds relatively steady in the new year. More stability means more vendors accepting crypto. Greater stability also means users can be more certain they are not overpaying for goods.