The rate of using Bitcoin for e-commerce transaction has drastically reduced recently according to research startup Chainalysis Inc. The low came from the high peak of $411 million in September the largest from 17 crypto merchant-processing services received to a volume of $60 million in May. The recent low is mostly attributed to the high cost of the transaction on the Bitcoin network.
The Decrease In The Trend of Bitcoin in E-Commerce
The rate of e-commerce transaction with Bitcoin has reduced drastically from the height it was last year. The statistics provided by research startup Chainalysis Inc on the peak of the total of $411 million received by 17 crypto merchant processing services in September and the low of $60 million it reached in May explains the circumstance. Even though there has been a leap in the transaction of BitPay, Coinify and GoCoin to $69 million in June, it is still a far contrast to the $270 million they had a year ago.
Most Bitcoin enthusiasts see Bitcoin as a replacement to the traditional fiat currency for transactions, but the aftermath of the rise in use, which leads to the present low seems to have lost its appeal as a tool for buying goods.
According to Nicholas Weaver, who is a senior researcher at the International Computer Science Institute, he states in a mail that “It’s not actually usable,” because “the net cost of a Bitcoin transaction is far more than a credit card transaction.”
The decline in the use for E-commerce transactions coincides with speculative investment in Bitcoin that saw it rise to the tune of $20,000 in December. Even though the value has gone to more than 60% low, it has remained steady in recent with speculations about another rise to take place; users are still wary of using it for transactions.
Giant payment service, Stripe Inc., stopped supporting Bitcoin in January as the use decline and price swing was intensifying. Other company also joined such as Expedia, a travel service provider. The reduction in usage seems to be an issue for the core Bitcoin proponents as a replacement for fiat currencies.
Bitcoin’s Trend In Usage
Despite the circumstance of decline be of cost transaction, the way Bitcoin is being used is changing, as the transaction fee peak to $54 last year and is presently less than $1. People are not using it for small transactions like buying coffee in-store or groceries, but it is still in use for paying vendors, like freelancers abroad.
The reduction in its usage is also tied to holders of the virtual currency seeing more as a medium of investment rather than the original plan which is to be a peer-to-peer currency for everyday use.
Nevertheless, the decline still does not stop the validity of bitcoin as a means of storing value and also a means of exchange. With more acceptance in the future, awaiting bitcoin ETF, and regulations, it will become more acceptable.