Theres alot of people encouraging new companies to use Bitpay or Coinbase as merchant solutions, just so they can accept the currency and they can take no risk. The problem with this is that it drives the price down.

Users who pay with bitcoin, have had that bitcoin, meaning they didn't just buy it to spend. Only a few are buying bitcoin just to immediately spend it.

For the people who already have bitcoin, when they spend it at these merchants who are using Bitpay or Coinbase, and settle in USD, they are just driving the price down.

We need to encourage getting merchants on board, that will actually hold BTC instead of just using it as a gateway.

For example: Dealerships - Some dude buys a 218btc lambo, BitPay will take it, and of course they will sell the 218 on the market. Essentially, this is just somebody dumping 218 coins on the market.

Amazon.com - We want them to accept BTC so bad, but if they did accept BTC, there would be such a huge number of people who would use Bitcoin to pay just in 1 day, Maybe thousands of btc in one day. Imagine when Amazon's bitcoin processor dumps all those coins so Amazon can settle in USD. It will trigger panic.

Overstock.com - They accept Bitcoin, they probably did so many transactions today, but all of those coins were dumped on the market. Thus driving the price down. Imagine how many bitcoins they made today, but they didn't hold onto any of them, instead they just dumped all those coins. Anyone who paid in Bitcoin on Overstock today, pretty much just helped lower the price.

Getting merchants on board is good, but we need to get merchants who will accept bitcoin, and hold bitcoin, or spend it somewhere else. This is what will truly help the Bitcoin economy.


This is why its better to support Bitcoin marketplaces like Coingig (rip Bitmit) because they actually circulate the coins rather than dumping them.

PS: I am not an economics pro or anything, but it just came to my mind and wanted to share it here.