Cryptocurrency receives another blow as online payment platform announces end of support.
There’s possibly nothing as uncertain as cryptocurrency right now, despite the continuous high stakes gambling involved in investing. All forms, from Bitcoin to Monero and beyond, are experiencing unprecedented attention, but that may soon be crashing to a halt.
First, South Korea announced a pending crackdown on what they see as the drug of choice for “get rich quick” citizens. Initially they were looking at shuttering some of the numerous trading platforms for the pseudo-money, but then went further to consider banning it within the country altogether.
Now, Stripe has announced its own blow to the payment method by saying it’s dropping support for Bitcoin payments. The decision was based on their view that consumers simply aren’t spending their Bitcoin, opting instead to horde it in a climate of climbing prices.
Bad news for Bitcoin
Daniele Bianchi, of Warwick Business School, is an Assistant Professor of Finance who researches cryptocurrencies. According to Dr. Bianchi, “There are signs that perhaps Bitcoin is the victim of its own success. Rising fees and longer transaction times are the natural consequence of the widespread increasing demand following the public hype and excitement surrounding it. This is bad news for the use of Bitcoin as a pure method of payment.
“Huge swings in price make the perfect case for not using Bitcoin as a method of payment. The fact that Stripe, the first major payments company that supported Bitcoin, is now scrapping such support is an interesting case in point. One may argue that this could be the beginning of an ‘epic crash’ following a demand collapse.
“The truth is that the increasing costs and processing times will spur interest in alternative coins and developments, rather than killing the aggregate demand. Setbacks are fairly normal in rapidly evolving markets, and the cryptocurrency one is no different.”
One of the other factors in Stripe’s decision is the cost associated with each transaction. With claims that each transaction can cost as much as $10US, a number of retailers have already stopped accepting Bitcoin for their transactions.