Bitcoin’s use in payments has reportedly dropped nearly 80% since the beginning of this year until September, according to data from major cryptocurrency payments processors. This, some claim, means the cryptocurrency is struggling to mature from a speculative asset.
According to Reuters, data from bitcoin’s drop as a payment method came from blockchain analysis firm Chainanalysis, which found the value of BTC payments dropped from a December high of $427 million to $96 million in September.
The firm reportedly surveyed 17 cryptocurrency payment processors like Atlanta-based BitPay and Vancouver-based Coinpayments. It noted, however, that data on bitcoin used for payments is “patchy” as some of its trades with other currencies are often included.
While different payment processors reported different data, Reuters specified Coinpayments saw its incoming and outgoing transactions drop by more than half between January and October of this year. Speaking about the data Lex Sokolin, global director of fintech strategy at Autonomous Next, stated:
Bitcoin payments processing is seeing a slow but consistent decline.
Notably, this year bitcoin saw a period of relative calm where its price was trading within an extremely tight range, so much so that it was less volatile than the stock market, as its 30-day volatility index fell to lows it hadn’t seen since December of 2016. To some, this type of stability is a requirement for it to become an alternative currency.
Solutions for its scalability issues have also seen various developments, as the Lightning Network (LN), a layer-two scaling solution that could help users make thousands of BTC transactions for next to nothing, has recently surpassed 14,000 payments channels and a $1 million capacity.
Speaking to Reuters Joni Teves, a strategist at UBS in London, stated:
There would have to be a stability requirement if it is to become another form of money. But one thing that would take bitcoin into the mainstream is scalability — is it able to process the value or volume of transactions that money tends to do?
The flagship cryptocurrency’s stability, however, didn’t last. As CryptoGlobe covered, bitcoin recently dropped below $5,000 for the first time since October of 2017. At press time, it is trading at about $4,500 after rising 4% in the last 24 hours.
Its drop has affected various companies in the tech sector, including chipmaker Nvidia, which saw its shares plummet after it blamed disappointing results on chips that piled up after demand from crypto miners disappeared.