Report: Use of Bitcoin in Commerce Hit Low in May After Peaking at $411 Mln Last Year
The volume of Bitcoin (BTC) used in commerce has declined significantly over the course of the last year, Bloomberg reports Aug. 1.
Citing market research firm Chainalysis, Bloomberg reported that the volume of Bitcoin received by the largest 17 crypto merchant-processing services hit a low of $60 million in May 2018, after reaching a peak of $411 million in September 2017.
The use of Bitcoin for payments has declined in tandem with its price, which peaked at almost $20,000 in December 2017 before its subsequent drop of over 50 percent.
While the amount received by services such as BitPay, Coinify, and GoCoin saw a slight rebound to $69 million in June, it bears a stark contrast to the $270 million received exactly a year before.
Nicholas Weaver, a senior researcher at the International Computer Science Institute, told Bloomberg that cryptocurrency is “not actually usable” as a form of payment. Weaver argued that the net cost of Bitcoin transaction fees is “far more than a credit card transaction.” Bitcoin transactions also cannot be reversed in instances of fraud.
Regarding price volatility in cryptocurrency markets, senior economist at Chainalysis Kim Grauer said, “When the price [was] going up so rapidly last year, in one day you could lose $1,000 if you spent it.” The economist called small purchases with crypto “impractical” due to high transaction fees.
Last year, Bitcoin transaction fees surged to all-time highs, peaking at $37, according to Bitcoinfees. Fees have seen a steady decline this year, fluctuating around $1 while seeing several short-term spikes up to $5. The average bank client spends up to $150 per year, or nearly $13 per month on service fees, according to the New York Post.
Bitcoin daily average transaction fees. Source: Bitcoinfees
On July 31, market strategy and research firm Fundstrat Global Advisors announced that the company will start accepting Bitcoin for content using Bitpay. Introducing Bitcoin payments will reportedly enable a global client base to access Fundstrat’s services, which was “nearly impossible before.”
In July, Bank of Canada found that 58 percent of Canadians use Bitcoin for investment purposes, while only 6 percent use it for payment. 12 percent of respondents said they own Bitcoin because “my friends own Bitcoin.”