Report: Despite the Resurgence in Price, Bitcoin Sees Little Adoption
Not so Bullish Behind the Price
It would be fair to say that the recent spike in the price of bitcoin has been largely successful in lifting the morale of the cryptocurrency industry. The charts are dominated by green candles and the general outlook towards the cryptocurrency is bullish.
However, behind this renewed optimism, the grim reality of bitcoin’s low adoption continues to persist.
Citing data from blockchain research firm Chainalysis Inc., Bloomberg reports that only 1.3 percent of bitcoin’s economic transactions came from merchants in the first four months of 2019. The world’s largest cryptocurrency which currently holds a market cap of more than $147 billion is yet to find that shot in the arm which could propel it into the mainstream.
One of the reasons why bitcoin has failed to achieve widespread use could be attributed to its own proponents. People who hold bitcoin have, over time, developed the “HODL” mentality which advocates accumulation of the digital currency rather than spending it. That said, it would also not be fair to put the entire blame on hodlers as the extremely volatile nature of the cryptocurrency also gives them hopes of making strong profits in a matter of days.
Kim Grauer, a senior economist at Chainalysis, told Bloomberg:
“Bitcoin economic activity continues to be dominated by exchange trading.”
“This suggests Bitcoin’s top use case remains speculative, and the mainstream use of Bitcoin for everyday purchases is not yet a reality.”
The study by Chainalysis found that between January and April 2019, bitcoin transactions related to exchanges accounted for 89.7 percent, marginally lower than 91.9 percent for all of 2018.
Can Bitcoin See the Mainstream Light?
Although the figures don’t paint a healthy picture of bitcoin’s use among the common populace, the increasing number of organizations warming up to digital currencies is an encouraging sign.
As reported by BTCManager on May 24, 2019, major U.S. telecom operator AT&T announced that it would allow customers to pay bills using bitcoin.
Moreover, with second layer off-chain scaling solutions like Lightning Network witnessing strong growth, things could end up being way brighter for bitcoin in the future.