Bitcoin's Rally Masks Uncomfortable Fact: Almost Nobody Uses It
By Olga Kharif | Bloomberg
May 30, 2019, 7:00 PM CDT
Bitcoin has a lingering problem that few people are talking about amid the renewed exuberance of the recent price surge. Hardly anyone is using the world’s largest cryptocurrency for anything beyond speculation.
Data from New York-based blockchain researcher Chainalysis Inc. show that only 1.3% of economic transactions came from merchants in the first four months of 2019, little changed over the boom and bust cycles of the prior two years.
Even though marque companies such as AT&T Inc. now let customers pay with cryptocurrencies, the problem is that few speculators want to use the digital coins to pay for wireless services when the digital asset’s price might surge another 50% in a matter of weeks.
That’s become the main dilemma with the cryptocurrency: Bitcoin needs the hype to attract mass appeal to be considered a viable electronic alternative to money but it has developed a culture of “holders” who advocate accumulation rather than spending.
"Bitcoin economic activity continues to be dominated by exchange trading," Kim Grauer, senior economist at Chainalysis, said in an email.
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