So now we have more merchants, like Overstock, accepting Bitcoin.
However, most of them use either Coinbase or Bitpay to immediately convert their Bitcoin stash to fiat.
For Bitcoin to grow, I would think that instead of just being a convenient means of transfer, it needs to become accepted as a legitimate store of value. How can we achieve that if merchants immediately trade it for fiat? Is there a way we can incentivize merchants to keep some of their reserves in Bitcoin? Right now I am sure Patrick Byrne, the ceo of Overstock, owns some bitcoin. However, Overstock doesn't. How do we develop more bitcoin--->bitcoin trade, instead of fiat--->bitcoin-->fiat?
Maybe some will, but we need to get more other merchants and services to accept it first so it's a vicious circle really. Most retailers won't be able to take the gamble on the price fluctuations, but accepting Bitcoin is better than nothing even if they do turn it straight to fiat. If retailers could pay their employees and suppliers and bills in Bitcoin, then they might hold on to it. Some smaller businesses may keep some as an investment, but I guess that's up to them and their circumstances.