Digital currency confronts as it seeks to establish in the world of payments. As it turns out, its use in actual payment transactions is based on Chainalysis Inc., a New York City-based firm whose software measures cryptocurrency volume in merchant services.
After holding steady at or above the $ 6,000 level for more than a year, Bitcoin Tuesday at $ 3,684, according to Coindesk, an online news service that follows cryptocurrencies. Indeed, after peaking in December at a nosebleed height near $ 20,000, Bitcoin eventually settled early in September.
Account for changes in value between the time and the customer. But Bitcoin's merchandise has been trending down all year, from $ 344.2 million in January to just $ 95.6 million in September, the last month for which Chainalysis has figures. The company says it gathers its data from 17 companies that provide merchant services for Bitcoin and other digital currencies.
Bitcoin's slide from its five-figure dollar value early this year as much as from any merchant aversion to accepting the cryptocurrency. But Kim Grauer, a senior economist at Chainalysis, caution against drawing any firm conclusions. "It's definitely a fuzzy topic," Grauer tells Digital Transactions News. "We're not positive what's driving a lot of this activity."
The merchant-acceptance market for Bitcoin is still in its infancy, leading to the volume in merchant volume. "It's hard to know if people are jaded, or in wait-and-see mode, or hodling," she says. The term "hodling" stems from a misprint for "holding" that happens on social media and refers to the decision to sit on as an asset rather than spend it.
Also, it could be quite expensive to spend Bitcoin. According to Bitinfocharts.com, the median network transaction fees to users has calmed down this year. Led development, with a congested network and lengthy transaction times Stripe to stop supporting Bitcoin. As of Monday, though, the fee stood at 28 cents and was held steadily well below the $ 1 level most of the time since March.
All told, Grauer says, the story behind the merchant-volume trends for Bitcoin "is a little more nuanced" than a simple conclusion that the digital currency is failing as a medium of exchange. "The infrastructure," she says, "is being built. 2017 was a year of buzz. 2018 is a year of the building phase. "