Why Bitcoin acceptance depresses the news spy

When companies accept Bitcoins, it sounds very gratifying at first: more shopping opportunities, larger network infrastructure and increased trust through the support of well-known companies. The two-sided medal explains why the big players in the race are still pushing down the Bitcoin price. Because Bitcoin acceptance is not the same as Bitcoin acceptance.

What motivates retailers to accept the news spy?

The first step, the dealer’s decision to introduce the news spy as a payment method, is the first step towards becoming a Bitcoin merchant. This provides merchants with similar benefits to the news spy customers:

Fraud prevention. Unlike credit cards, for example, payments cannot simply be cancelled (by fraudsters).
Savings in fees. The fees are negligibly low compared to other payment methods.
New niche market. In terms of Bitcoin acceptance, the Bitcoin continues to be a niche product. And integration as a payment method appeals to the special audience of Bitcoin enthusiasts, which at the same time sets Bitcoin apart from the competition.
Acceptance is not equal to acceptance
Bitcoin payment processing models can be divided into two opposing categories: Native settlement and Bitcoin As a Service. The last term was freely chosen by me.

Native Bitcoin Merchants

Native acceptance is usually what one imagines under normal payment processing for a purchase with Bitcoins: The customer sends Bitcoins, the merchant receives the Bitcoins.

Bitcoin As a Service
I have chosen the phrase “as a service” for this model because merchants who follow this method do not actually accept Bitcoins directly. You only use the Bitcoin for payment, just like the buyer’s credit card, and you don’t want anything else to do with it. In contrast to native integration, the customer pays Bitcoins and the merchant receives money (e.g. dollars or euros). For this purpose, a service such as Bitpay usually comes into play, which takes care of the actual payment processing. As a rule, the online shops themselves do not come into contact with Bitcoins at all; in the end, only the converted money is transferred to them.

Bitcoin acceptance as a price brake
It is obvious that native Bitcoin acceptors (as presented above) do not necessarily have a positive effect on the price. The Bitcoin user pays his purchase with Bitcoins and since the merchant is only interested in Fiat money, true to the motto “Only cash is truth”, the Bitcoins are sold immediately.

The consequence: The price is pushed. The dealers push their Bitcoins, which are converted in the purchases, masses on the market. Since they are primarily interested in receiving cash quickly, the selling price is oriented towards below rather than above the current price.

Only cash is true
Most retailers only accept Bitcoins as a service. So far, this method has more advantages for merchants as it offers security in many ways. The direct exchange into cash saves the trader a lot of effort:

No price fluctuations. The fast sale allows small price fluctuations to be taken into account, but the trader does not risk major losses that would be possible if he kept the Bitcoins longer.
Tax situation. As a young innovation, Bitcoin has not yet officially arrived in many countries and there is a lack of clarity about the tax assessment. When exchanging e.g. into euro dealers can calculate their taxes as usual.
Too small a network. A company has to handle many costs. As an example already the coworkers are enough. So if income is generated in Bitcoin, then employees, suppliers and goods would also have to be paid with Bitcoins. Since the ecosystem is not large enough, however, the retailer cannot avoid exchanging his Bitcoins for Fiat currencies.
The decision to accept Bitcoins only as a service is therefore understandable at this stage. Especially the big companies like Dell rely on this model. However, smaller shops like Bester-Tee swear by native acceptance and (initially) keep the Bitcoins themselves.

Bitcoin: Can the crypto trader soon compete with the stock market?

Bitcoin’s volatility is falling steadily. While fluctuations of the Bitcoin exchange rate in the double-digit range were not uncommon a year ago, the crypto currency number one now seems to have levelled off somewhat. In the last 24 hours, the Bitcoin exchange rate has only dropped by 0.64 percent, in the course of the month by just under 3.3 percent – a sign of maturity? There is some evidence that we are dealing with a crypto currency that is slowly gaining maturity.

Bitcoin, originally set out to turn the banking system around, had (and still has) to struggle with some initial difficulties. First, there is the image of the dingy Internet currency, which exists only to facilitate terrorism and money laundering. A picture that is still persistent. In addition, there are constant doubts as to whether it is not a snowball system or the largest bubble the world has ever seen. This, combined with the high price volatility, has also been an argument that, for example, the US Securities and Exchange Commission has prevented Bitcoin ETF from being approved. However, as several researchers at the University of Krakow have now discovered, some things have changed in the country of crypto currencies.

Comparison of Bitcoin and crypto trader

The scientists now compared the fluctuations in the Bitcoin exchange rate with the crypto trader and onlinebetrug those of the (supposedly) mature markets and determined:

“[…] the Bitcoin market and possibly other crypto trader currencies have concrete potential to soon become a regular market – as an alternative to the foreign exchange market. ”

They analysed the data for the period from 1 January 2012 to 31 March 2018 by filtering out trading data one minute apart. Among other things, they examined the relationship between trading volume and price fluctuation (volatility). Particularly in view of the last peak phase in December, they found that everything points to the Bitcoin market currently becoming more mature.

Bubble formation: a normal phenomenon

Probably the most remarkable finding of the study: The bubble formation during the peak phase in December 2017 indicates that the market is maturing.

Because:

“On December 16, 2017, the Bitcoin market experienced a spectacular turnaround. It changed from strongly growing to sharply declining […]. Such phenomena are well-known products from mature financial markets and occur unstoppably in [all markets] […]”.

It is above all the bubble phase that suggests that the market has now matured after the brief sharp rise and the bursting of the bubble:

“One of the simplest parameters for the temporal development of the price is [a correlation of two parameters] in the (growing) bubble phase […]. There is some empirical evidence that [this correlation] is common, perhaps universal, in financial markets”.

They ultimately come to the conclusion:

“The Bitcoin market has very quickly developed the statistical characteristics that characterize all “mature” markets, such as stocks, commodities or foreign exchange trading. It seems obvious that other crypto currencies follow this example. This could lead to a completely new market […].”

Binance raffles off 37,000 BNB tokens

The Bitcoin exchange Binance is giving away a total of 37,000 of its platform’s own BNB tokens. The Binance Coins are mainly intended for the operation of the exchange, but can be exchanged for other crypto currencies such as Bitcoin at any time. The competition selects the best trading strategy.

The Bitcoin exchange Binance is one of the largest exchanges for crypto currencies in the world. While Bitfinex’s competitors are slowly but surely losing the trust of their clientele, Binance continues to put itself in a positive light. Binance is not only strong in the humanitarian sector, but has also launched a competition. A total of 37,000 Binance tokens (NBBs) can be won.

Bitcoin as a benchmark

The competition is about showing who has the best trading strategy. As you can see from a blog post, there are no initial restrictions on the competition. Participants can use the crypto currency and the amount of crypto currencies of their choice and show their optimal trading strategy. The ranking is done retrospectively in such a way that the traders who make the highest percentage profit win. All winnings are converted into Bitcoin in order to take the value in Bitcoin as a benchmark.

Division of the tokens

The total prize of 37,000 BNB tokens will be divided among the 50 best traders. For the first place you get 8.000 BNB, the second place gets 4.000 BNB and the third place gets 2.000 BNB. A further 6,000 NBB will be divided between places four to ten. The remaining traders (places eleven to 50) each receive 175 NBB. The BNB tokens can be used, among other things, to pay the transaction fees on the Bitcoin exchange.

Is it worth it? The Binance Coin is currently just under USD 9.80. So Binance is raffling a total of around USD 362,000, for the first prize you get the equivalent of USD 78,400. The BNB token currently ranks 14th among the crypto currencies with the highest market capitalization. A total of almost 190.8 million digital coins circulate in the vastness of crypto space. It remains to be seen whether traders are prepared to reveal their trading strategies for these sums.