Thursday, July 13, 2017

Bitcoin slowly losing its potential as a currency as investors hold onto them for profit rather than spending them as money

In a very interesting report put out by Morgan Stanley on July 12, retailers are losing interest in co-opting Bitcoin into their point of sale systems primarily because Bitcoin buyers are not spending their digital coins.

In fact, Morgan Stanley asserts that the vast majority of Bitcoin buyers (investors) are the problem since they are primarily purchasing the cryptocurrency as a speculative investment with the hopes of the price going higher rather than using it as the founder intended which is as an everyday medium of exchange.

The skinny of the Morgan Skinny's analysis: Rather than buying bitcoin, owners need to be spending it. 
"Bitcoin acceptance is virtually zero and shrinking," the team of Morgan Stanley analysts led by James Faucette wrote. 
The bank notes that while five online merchants out of the top 500 tracked by e-commerce analytics site Internet Retailer accepted Bitcoin last year, that figure has now shrunk to three. 
Part of the problem? 
"Bitcoin owners are reluctant to use the cryptocurrency given its rate of appreciation," they wrote. 
Still, it's understandable why investors have been so hesitant about spending the cryptocurrency. Bitcoin has been on a winning streak for the majority of this year. And it is hard to spend something when is has the potential to add $200 in a day or go from say $25 dollars to $22 million over the course of seven years. 
"The [Bitcoin] ecosystem has focused more on value speculation rather than the foot leather-eating work of increasing acceptance," the team wrote, saying that that focus has made it "way easier to trade speculatively than convince new merchants to accept the cryptocurrency." - Fortune
Additionally, Bitcoin has not reached that point of critical mass where retailers are willing to re-calibrate their POS (Point of Sale) systems to directly accept Bitcoin, and instead simply accept 3rd party conduits like Fold which are payment systems that you load up with Bitcoin and they do they conversions for you and the retailer.  But even with this, you are still paying for products and services in dollar pricing, rather than the stores showing the Bitcoin price on the display.


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