As bitcoin saw a rapid surge in its price this year, Bloomberg reports that already-skeptical retailers became even less welcoming of the cryptocurrency than before.
In fact, citing data from the trade publication Internet Retailer, Bloomberg notes that only three of the top 500 online retailers are currently accepting bitcoin. In a note sent out on Wednesday, Morgan Stanley payments analyst James Faucette said that “the hesitance among retailers may also be linked to bitcoin’s scaling challenges, as transactions become slower and more costly,” according to Bloomberg.
“Bitcoin owners are reluctant to use the cryptocurrency given its rate of appreciation, more evidence that bitcoin is more asset than currency,” Faucette said. “Way easier to trade speculatively than convince new merchants to accept the cryptocurrency.”
Atlantic Financial founder Bruce Fenton, who sits on the board of the Bitcoin Foundation, told Bloomberg last month that many cryptocurrency users have turned away from bitcoin because of its increased fees. However, Overstock.com Inc. board member Jonathan Johnson told Bloomberg in May that bitcoin transactions have tripled since they were first allowed in 2014, accounting for “as much as $5 million per year.”
Meanwhile, Bloomberg also reports that cryptocurrencies continue to take a beating, losing about a third of their market value since hitting their peak on June 12. In fact, the market has now hit “what traditional equity market analysts label as a bear market,” according to Bloomberg.
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