The past 24 hours have been very interesting for anyone involved with Bitcoin. While there doesn’t seem to be an exact cause, the Bitcoin price has been climbing back above US$400 for the first time in 6 weeks. While we could look at possible reasons for this , without any proof or evidence like other news outlets, I want to look at things from a different perspective.
The amount of Bitcoin transaction seems to be growing, according to the data we can pull from Blockchain.info. So much even that we are getting close to the total amount of transactions we had at our last mega Bitcoin bubble, when prices topped the US$1,000 mark.
Oddly enough, you would assume that more people are spending their Bitcoin for commercial reasons, like buying goods or gift cards and stocking up on presents for the Christmas holidays. That is not the case either, as the graphs show the amount of transactions costs is not rising.
What do transaction costs have to do with e-commerce, you might wonder? Quite simple to explain really, ecommerce payments are mostly subject to a transaction fee, while sending money from one wallet to another doesn’t cost you anything most of the time.
While I’m very happy about the current price trend (which seems to keep on rising for the time being), I’m a bit concerned about the reason why. Bitcoin is not making positive headlines by any stretch of the imagination. No major partnerships are announced. And merchant adoption doesn’t seem to have any effect on the price at the moment.
Large amounts of Bitcoin are being moved around, but it’s hard to see how that could possibly influence the price in a positive manner. But if these coins are not going towards actual ecommerce spending, where are they ending up? And why are there not more commercial transactions at this in time, as the Christmas holidays are coming closer?
I’m not sure how many people will actually care about the current price increase, as it benefits all of us in the end. However, when there is no real reason for the price going up, it could start dropping off at the same rate any time now, and that is what really worries me.