You might have read a few articles of late in which Morgan Stanley are heralding if not the end of crypto currencies, then at least their steady decline. A recent research note stated that “Bitcoin acceptance is virtually zero and shrinking”, citing the fact that at the time of writing, only three of the top 500 merchants accept Bitcoin payments.
They give three reasons for the decline, and we think it’s only right to address them. As a Bitcoin investor or enthusiast, it’s perfectly reasonable to wonder if it’s time to get rid of your stock. However, this may make you feel differently.
- Bitcoin is an investment vehicle, not a currency – it’s true that Bitcoin has seen steady growth in the region of 250% in the past year (allowing for brief fluctuations), and that makes it an attractive proposition for the investor with their eye to the medium and long-term. However, Bitcoin hasn’t yet had its 10th birthday, making it and other cryptocurrencies relative newcomers in the financial transaction universe.
- Transactions can be slow and expensive – this is true, but again, it’s due to the steady growth of Bitcoin. Granted, this can make it an unattractive prospect to trade in without safeguards, but when a Swiss private bank decides to provide blockchain asset management solutions to clients using their cash holdings, you can rest assured that Bitcoin is being taken seriously at the highest money level.
- No pressure on merchants to accept Bitcoin as payment – back to those three top 500 merchants; we believe that Morgan Stanley are being understandably conservative in terms of their US readership and investors. It is true that US merchants would still seem to be reluctant to take Bitcoin on board as a payment method. However, the US isn’t the only major financial territory in the world. Austrian post offices accept Bitcoin as a payment method, and as mentioned above, Switzerland’s main private bank is fully behind offering Bitcoin as an investment to its customers. Most significant in terms of payment acceptance is Japan, where several companies accept Bitcoin as readily as Yen.
There’s no doubt that acceptance will grow as Bitcoin and other cryptocurrencies continue to establish themselves as both investment vehicle and payment method. It could also be argued that Morgan Stanley’s stance is a deliberate attempt to force the price of Bitcoin down, potentially for their investors to cash in by buying cheap and selling high at a later date.
It could also be viewed as a natural suspicion of the new, and particular the new outside its main areas of operation. If that’s short-sighted, then consider this; over a quarter of a million stores in Japan accept Bitcoin as payment for goods, with point of sale apps Bitcoin ready. That includes Megane Super, a chain of optometrists – the perfect place to buy a pair of glasses using Bitcoin, and have a clearer view of the future.