Support for top payment giants like PayPal is promising to shore up the case for mass bitcoin transfers. However, the rapidly rising price of Bitcoin in USD poses a significant challenge to the implementation of Bitcoin denominated payment systems. A variety of altcoins rally alongside Bitcoin, and making payments in cryptocurrencies might not be the default option for everyone. Just as Nic Carter, Partner at Castle Island Projects, put it in his talk with Frances Coppola, a renowned economist, and author, “I always regret it when I buy bitcoin stuff.” With returns of nearly 27.6 percent of YTD, Bitcoin transfers could not be taken up anytime fast. The denomination of Bitcoin in USD makes it a profitable investment vehicle and limits its acceptance to traders and investors who see it as a wealth-generating high-risk, high-ROI currency. This restriction would definitely impede the acceptance of bitcoin-denominated payments.
The instability and momentum of the network that is crucial to the acceptance of Bitcoin is a double-edged sword. The same uncertainty that is rising the price makes it less profitable for traders and individuals to be part of their bitcoin. Via active participation and purchasing from institutions, the bull run can gain boosts from time to time, but the effect may end there. With respect to the rise of Bitcoin, this may not be the ‘Eureka’ moment that maximalists and supporters have been hoping for. It is more likely that the recent market surge would be an opportunity to trade and that acceptance will, however, be a game-changer.
Currently, the number of transactions has exceeded the monthly volume since January 2017 based on data from Statista.
Number of Bitcoin Transactions/ Monthly transaction volume || Source: Statista
The graph reveals that the number of purchases in January 2021 has surpassed that of the last three years since January 2017. However, even the actual amount of transactions is nowhere near the projected volume of transactions. As mass acceptance kicks in, transaction volume and price will no longer be important, since more crucial indicators such as transaction processing time, swap payment time, deposit and withdrawal time to and from wallets will be of greater importance. By then, the mass acceptance of Bitcoin could be a pipe dream.
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